Vale’s optimistic outlook for the iron ore market, expecting prices to reach $70/mt in the second quarter of the year and sustain for much of 2015, is not feasible according to SteelOrbis sources.
In an interview with Brazilian media, Vale’s CEO, Murilo Ferreira, said the company forecast an increase in current prices for iron ore containing 62 percent Fe. With less producers disputing in the global market, Vale expects the product to reach $70/mt in the Chinese spot market.
“It’s too much optimism,” said one iron ore trader. “Prices might recover, but not that much. And if prices increase, other producers will come back to the market and we’ll continue to have an excess of supply.”
At the most, sources expect prices to reach a range of FOB $65-$67/mt.
“Vale’s projection sounds like an empty conversation to convince investors,” the trader added.
As of February 3, 62 percent Fe iron ore was traded at the level of FOB $62/mt.
1 US$ = BRL 2.83