Brazil’s Vale Sees Chinese Economic Growth Gradually Slowing to 6%
RIO DE JANEIRO–Brazilian mining company Vale SA said Wednesday that China’s huge steel industry “may become less buoyant” in coming years as the country’s economic growth gradually slows to 6% and reform measures put the brakes on infrastructure development.
On the upside, growing concerns about pollution should force Chinese steelmakers to shut down inefficient mills and seek better raw materials, raising premiums for the high-grade iron ore Vale extracts from its mines in Brazil.
Vale has a large finger on the pulse of China’s economy as the world’s largest producer of iron ore, a key component in steelmaking. The Asian country produces around half the world’s steel and is Vale’s biggest customer, accounting for 38.6% of the Brazilian company’s $49 billion in revenue last year.
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