NEW YORK – Mining company Vale believes iron-ore prices will increase after the Winter Olympics in China scheduled for February as Beijing is likely to allow more steel producers to regain production capacity.
China's government has been asking plants in several sectors, including steel, to reduce production to cut air pollution before the sporting event.
Vale's VP for Strategy and Business Transformation Luciano Siani told reporters after a meeting with investors at the New York Stock Exchange on Monday that he expects industrial activity in China to grow once the Games are over, boosting iron-ore prices.
Siani, however, does not see a large price gain, saying the tonne of steel's raw material is likely to stay between $90 and $120 or $130.
Spot prices of iron ore with 62% iron content for delivery to China, compiled by SteelHome consultancy, rose $3 to $105 a tonne on Monday.
Prices had been falling heavily from a peak of above $230/tonne in May.
Siani also talked about the future of some business units at the company, such as coal and base metals.
He said that discussions about the sale of the coal business are progressing and that an announcement is likely around the beginning of 2022.
About the base metals unit, the executive said the company is working to make it more independent from the rest of the company, so Vale could have the option to sell it if it decides for that path.
But Siani said a decision regarding base metals will not come before 2023.