Vale sees Russia-Ukraine war squeezing iron ore pellet market

May 03, 2022

.

Vale ( Vale +2 %) expects Russia's invasion of Ukraine will increase the premium that steelmakers pay for iron ore pellets beginning in Q2, as the two countries together account for ~30 % of the 120M-ton global market.

"The big question is how long this tension will last," Vale iron ore head Marcello Spinelli said on Friday's earnings conference call, according to Bloomberg.

The miner also sees the Russian invasion likely accelerating gains in the price of nickel, a market that was already characterized by low inventories.

Nickel prices have jumped 40 % YTD, and Vale executives said on the call that they expect demand will double in the next decade as automakers transition onto electric vehicles.

Also, CFO Gustavo Pimenta said on the call that Vale would not take on responsibility for debt held by its Samarco joint venture with BHP.

Analysts were generally disappointed by Vale 's weaker operating income and low cash flow generation, according to Reuters, with higher provisions related to two dam disasters.

Vale 's Q/Q decline in operating income was driven mostly by lower realized iron ore prices, which more than offset strong iron ore sales and lower cash costs, while provisions led to weak cash generation and were a negative surprise, Itau BBA said.

Vale 's operating figures were solid, but cash generation was weak and the provisions "might have taken some investors off guard," analysts at Bradesco BBI said.

Over the current book year the total revenue from the company in Null will be 49.53 billion USD (consensus estimates). This is rather significant lower than 2021's revenue of 293.52 billion USD.

Historical revenues and results Vale plus estimates 2021

The analysts expect for 2021 a net profit of 18.63 billion USD. For this year the consensus of the result per share is a profit of 3.95 USD. So the price/earnings-ratio equals 4.15.

Huge dividend Vale

For this year the analysts expect a dividend of 1.93 USD per share. Thus the dividend yield equals 11.78 percent. The average dividend yield of the mining companies equals a low 0.81 percent.

Based on the current number of outstanding shares Vale 's market capitalization is 84.08 billion USD. -5

At 16.35 the stock trades 2.07 percent higher at 16.39 USD.

Historical stock prices Vale

ValueSpectrum.com News Wire & Equity Research: +31 084-0032-842
news@valuespectrum.com

Copyright analist.nl B.V.
All rights reserved. Any redistribution, duplication or archiving prohibited. analist.nl doesn't warrant the accuracy of any News Content provided and shall not be liable for any errors, inaccuracies or for any actions taken in reliance thereon.

Other stock news

Stock Vale goes ahead in America in terms of dividend yields

Vale sells coal assets to Jindal

Voisey’s Bay Mine awarded Miner of the Year

Vale gets SEC notice on potential probe of Brumadinho case

Vale to relinquish mining prospect rights on Brazil's indigenous lands

EMPLOYEES CONTINUE TO EXIT VALE’S TOTTEN MINE

VALE INVESTS $150 MILLION TO EXTEND LIFE OF MANITOBA OPERATIONS

Sector news

Stock Vale goes ahead in America in terms of dividend yields

BHP maintains iron ore production guidance, cuts outlook for copper and nickel

Rio Tinto starts iron ore deliveries from $3B Australia mining project

Rio takes control of Australia partnership with Russia's Rusal

Analysts count on revenue increase Rio Tinto, quite high dividend

Rio Tinto ripped for 'corporate governance failures' by activist shareholder

National news

NXP reaps benefits from FRAMOS collaboration

Tesla net onder de 500.000 cars per year

Analysts expect over 2024 revenue decrease Caterpillar

Analysts expect sales decline Biogen

Analysts anticipate for 2024 on revenue increase Cognizant

Analysts expect over 2024 growing sales Colgate-Palmolive

Analysts expect over 2024 revenue expansion Patterson-UTI Energy, relatively high dividend

Press news

Test News

Share Buyback

Exasol secures additional contracts from the financial sector and achieves its planned growth target for 2024

Enlight Announces the Financial Close for Project Roadrunner

Transactions in connection with share buyback programme

Tower Semiconductor Releases 300mm 65nm 3.3V-Based BCD Power Management Platform

Fixing of coupon rates - Nykredit Realkredit A/S

About us	Network	Partners
Fpgroup.nlinfo@analist.nlRSS feedContactIntellectual Property Photos	Analist.nlLinksISIN Glossary	MorningstarPrudena.comAAII.comNASDAQvwd GroupEuronextBATS Chi-x