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Brazil’s Vale reports first-quarter profit miss


Shares in Vale slumped the most in two weeks, as executives signalled lacklustre trends for iron ore prices this year and investors reacted to a first-quarter profit miss with disappointment.

Preferred shares, world No. 1 iron ore producer Vale’s most widely traded class of stock, shed as much as 4 per cent. The decline thwarted a recovery in the stock that had made gains this week on expectations Vale would report a near record quarterly profit.

On a conference call to discuss the March quarter results, company executives said supply and demand of the main ingredient for steel look balanced. In February, Vale’s head of ferrous minerals Peter Poppinga expected prices hovering around $US80 a tonne this year.

While both Poppinga and outgoing chief executive officer Murilo Ferreira gave a rosy outlook for productivity metrics and extraction costs, some investors have questioned Vale’s over reliance on iron ore price behaviour to boost profitability and cut debt.