Iron Ore Falls as China Steel Cuts Bite Vale
Iron ore proxies slipped on Friday as Chinese mills cut blast furnace runs and pig iron output, dragging Vale's New York shares down 1.04%. The post Iron Ore Falls as China Steel Cuts Bite Vale appeared first on The Rio Times .
Iron ore prices fell on Friday as Chinese steelmakers reduced production, cutting demand for imported ore. Chinese steel output declined to 2.4028 million tonnes daily, a drop of 5,200 tonnes from the previous week, according to Mysteel. Vale's shares on the New York Stock Exchange ended down 1.04% at US$15.28. Brazil's second-largest iron ore exporter, represented by Vale, saw its shares fall more sharply than other major miners.
CSN Mineração, a pure-play iron ore producer, dropped 3.86% to R$6.72. The decline reflects negative steel margins in China, prompting mills to reduce output rather than purchase more raw materials. China's steel margins now determine iron ore prices, and Latin American producers have little pricing power. With China accounting for 75% of seaborne iron ore consumption, the blast furnace operating rate and pig iron output are key indicators for Vale and its peers.
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