en.Wedoany.com Reported - The world's largest iron ore producer, Vale SA, CEO Gustavo Pimenta stated that the company has not seen signs of declining global metal market demand due to the conflict with Iran, but has instead observed improved profitability.
In an interview in Rio de Janeiro, Pimenta said the Brazilian mining company is focused on developing its own assets rather than pursuing acquisitions. He noted that global demand for critical minerals is "super favorable" for Vale. Disruptions in the Strait of Hormuz have led to higher fuel prices and freight costs for mining companies, with cost pressures in the first quarter offsetting price increases and volume growth.
Vale raised its full-year free cash flow forecast for its core iron ore business by $1.5 billion to reflect the rise in iron ore prices since the outbreak of the conflict with Iran. The company expects an average iron ore price of $112 per ton this year, compared to $102 per ton under a pre-conflict scenario. Pimenta is "very optimistic" about the full-year outlook. Although China's steel production may have peaked, Vale believes demand growth will increasingly be driven by other regions such as Southeast Asia, Europe, and the United States.
The CEO stated that India will become a major growth engine, with its crude steel production expected to double over the next decade.
Vale previously postponed the restart of its Oman pelletizing complex to the third quarter, citing war-related logistical constraints. The plant has an annual capacity of 9 million tons of iron ore pellets, accounting for about 29% of the company's total output. Pimenta said the restart must be delayed until the conflict ends. Despite the ongoing Middle East conflict, Vale still views Oman as a strategic hub for supplying regional customers.
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