Iron ore retreats and Vale announces Capex reduction; stocks trade in decline By

© Reuters.

By Ana Beatriz Bartolo – The shares of Vale (SA:) lost the strength of the beginning of the day and traded down 0.12%, to R$94.93, at 11:53 am. The miner is impacted by the 1.46% drop in the price of oil at the Chinese port of Qingdao and the announcement of reduced Capex investment forecast for this year. For Mirae Asset, the company must be anticipating a drop in demand for iron ore or a difficulty in acquiring equipment or inputs.

For Ativa Investimentos, the reduction of Capex this year from US$ 5.8 billion to US$ 5.4 billion may be more an operational issue than a cyclical one. According to the broker, the reduction is small and probably motivated by the seasonality that usually happens in the first quarter.

Vale also announced today an investment of US$ 185 million for the next two years in the production of “green briquette”, an iron ore compound and a technological solution of binders, which could reduce the emission of gases by up to 10%. greenhouse effect in the steel production process.

This compound allows the steel sintering phase to be skipped. In this phase, the fine ore is agglomerated at a temperature of 1,300ºC, with intensive use of fossil fuels, which generates a lot of CO². The “green briquette” will be produced at the 1 and 2 pellet plants at the Tubarão unit, in Vitória (ES), and at a unit that will be built at the Vargem Grande Complex (MG). The start of operation of the three units is expected for 2023.

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