RIO DE JANEIRO–Brazilian mining giant VALE SA (VALE, VALE5.BR) believes global demand for iron ore is “far from peaking,” though growth in coming years may not be as robust as in the past decade, company executives said Monday.
“We believe that the industry’s cost curve, and depletion of existing mines, will sustain prices even in a moderate-growth scenario,” Jose Carlos Martins, Vale’s ferrous minerals and strategy director, said in the company’s annual Vale Day meeting with investors.
Vale expects to be producing 400 million tons of iron ore, the main raw material in steel production, by 2017.
Demand in China, the world’s biggest consumer of iron ore, has seen slower growth in recent years after booming demand in the mid-2000s.
Mr. Martins said that while Chinese demand won’t be “so exuberant” as in the past 10 years, “there is a lot of growth left in China.” He noted that China’s accumulated consumption of steel remains “far from reaching developed countries’ level.”
Regarding China’s refusal to let the company’s fleet of Valemax cargo vessels enter the country’s ports due to safety concerns, Mr. Martins said he expects ongoing diplomatic negotiations to deliver results during 2013.
“We believe that sooner rather than later, we’ll be able to berth these vessels in China,” Mr. Martins said.
-Paul Kiernan (c) 2012 Dow Jones & Company, Inc.