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Premier eFinance: Vale shares likely to be boosted by Chinese demand - CFO.
Iron ore demand from China, the world’s biggest consumer, has not slowed despite government clamp downs on credit.
By: Premier eFinance
Although the Chinese government has tightened up on credit to fight inflationary pressures, infrastructure and major construction works remained unaffected, Vale's chief financial officer Guilherme Cavalcanti told Premier eFinance.
In a recent research note, Goldman Sachs said that it had raised its forecast for iron ore prices in China for 2012 and 2013 to $160 and $145 a tonne respectively due to tight supply-demand fundamentals. The earlier forecast had been for $145 and $110 a tonne.
Cavalcanti went on to say that the firm’s stock is expected to recover from recent drops, lifted by the Chinese demand, as well as a steady investment plan under the company's new leadership.
Vale’s stock has fallen since January as the Brazilian government pushed out former CEO Agnelli in an attempt to bring the company better in line with the country’s industrial policy.
Murilo Ferreira has since taken over as the new and announced that there would be no changes to the company's business plan and that he would work to improve the strained relationship with the government, Premier eFinance sources report.
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