Iron ore market in chocolate

Vale, the world's largest iron ore producer, says the industry is taking advantage of the sweet moment when rising prices generate a neat profit, but not enough for a long run.

“The market is in a sweet spot right now with iron ore prices ranging from $ 60 to $ 70,” said Vale SA Chief Financial Officer Luciano Ciani Pires. "It's a price that doesn't drive too many opportunities, but it's a very lucrative range for big mining companies."

Steel ingredient prices have seen ups and downs this year, reaching $ 95 a tonne in February after falling to $ 53 in mid-June. Prices are now back to $ 70 a tonne after increased demand from Chinese steel mills.

Even more for Vale than for its main competitors, Rio Tinto Group and BHP Billiton Ltd. - Differences in the price forecast is a “big deal”. The CFO said: “Every $ 1 drop in iron ore has a $ 350 million impact on the Brazilian company. This, in turn, affects its ability to reduce its massive $ 22 billion in debt and return cash to shareholders. ”