Brazilian iron ore miner Vale remains optimistic about the long-term outlook for iron ore and critical minerals despite signs that China has reached a plateau in steel production, according to CEO Gustavo Pimenta.
Speaking to Bloomberg Television, Pimenta said demand for iron ore and other key commodities remains historically strong as countries invest in infrastructure, industrial development and supply chain security.
While China continues to be Vale’s largest market, the company is increasingly benefiting from demand growth in other regions, including Southeast Asia, India, Europe and the US.
China reaches steel production plateau
According to Pimenta, China has likely reached its peak level of crude steel production at more than 1 billion mt annually. Rather than continuing to expand output, Chinese steel production is expected to stabilize around current levels.
Although this may limit future demand growth from the world’s largest steel-producing nation, Pimenta does not view the development as a significant threat to its long-term prospects. Instead, he sees other regions stepping in as important drivers of future iron ore consumption.
India and Southeast Asia become key demand centers
Pimenta believes India will play a particularly important role in supporting future iron ore demand. He stated that India’s crude steel production is expected to double over the next decade as the country accelerates infrastructure development, urbanization and industrial expansion.
At the same time, Southeast Asia is emerging as another major growth market, with several countries expanding steelmaking capacity to support economic development and manufacturing growth. The US is also contributing to demand growth as domestic steel production and manufacturing investments continue to increase.
Vale prioritizes expansion of existing operations
Rather than pursuing major acquisitions, Vale intends to focus on expanding production through brownfield investments at its existing mining operations, according to Pimenta. Pimenta explained that the company benefits from extensive infrastructure already in place, including railways, ports and logistics networks. This allows Vale to increase production capacity more efficiently and with lower capital intensity compared with developing entirely new projects.
He emphasized that Vale is also open to partnering with local and international investors to accelerate the development of critical mineral projects. According to Pimenta, several collaborative initiatives are already underway both in Brazil and internationally. Such partnerships can help share investment costs, reduce project risks and accelerate development timelines.
Higher oil prices have not affected demand
Addressing recent increases in oil prices, Pimenta said Vale has not experienced any meaningful deterioration in customer demand. Although higher fuel costs have increased transportation expenses, rising commodity prices have more than compensated for those additional costs. Iron ore prices, in particular, have strengthened sufficiently to offset the impact of higher freight expenses. Vale has also benefited from long-term freight agreements and fuel hedging arrangements that have limited exposure to market volatility
Oman pellet plant remains strategic despite disruption
Pimenta also commented on Vale’s pelletizing operation in Oman, which has been temporarily affected by regional conflict. He stated that the company is prepared to restart operations once safety conditions improve and employees can return safely to the site.
Despite the temporary disruption, Vale continues to view Oman as a strategically important location. The company is currently expanding the facility and plans to double its capacity, reinforcing its role as a supply hub for customers in India and Southeast Asia.
Strong outlook for 2026
Pimenta stated that Vale reported strong operational performance during the first quarter of 2026, including record first-quarter iron ore production. Although higher fuel prices have increased operating costs, Pimenta noted that stronger commodity prices have supported margins, leaving the company on track for a solid financial year.
The CEO compared today’s demand outlook for critical minerals with the iron ore supercycle experienced between 2010 and 2014, suggesting that the current opportunity may be even larger. He highlighted Brazil’s abundant mineral resources, established infrastructure and favorable geopolitical position as key advantages that support Vale’s long-term growth strategy and its ability to benefit from rising global demand for iron ore and critical minerals.
