Click here to close now.




















Welcome!

News Feed Item

Zacks Industry Outlook Highlights: Vale, BHP Billiton and Rio Tinto

CHICAGO, Aug. 29, 2014 /PRNewswire/ -- Today, Zacks Equity Research discusses the Industrial Metals, including Vale S.A. (NYSE:VALE-Free Report), BHP Billiton Limited (NYSE:BHP-Free Report) and Rio Tinto plc (NYSE:RIO-Free Report).

Zacks Investment Research, Inc., www.zacks.com

Industry: Industrial Metals

Link: http://www.zacks.com/commentary/34174/

Iron ore prices had a bullish run in 2013, in contrast to other base metals, thanks to heightened demand from steel end-consumers, particularly in the Chinese construction sector. However, the scenario changed dramatically in 2014. In March, the industry was dealt a severe blow, with iron ore prices suffering the sharpest one-day drop since the 2008-2009 financial crisis, tumbling 8.3% to close at around $105 per ton. This represented an 18-month low for iron ore prices.

Since the first quarter, iron ore prices had somewhat recovered but again plunged to $89 per ton in June -- the weakest performance since September 2012. In August, prices again slid below the $90 per ton threshold.

So far this year, the commodity has lost 33% of its value. Overall, prices have been impacted by myriad reasons such as excessive inventory along with abundant supply of iron as mining companies increased their output, as well as tight credit and slow economic growth in China. Global steel production, as per the World Steel Association, rose by a meager 2.4% in the first seven months of 2014, mainly dragged down by a slowdown in China's output that affected demand for iron ore, its main ingredient.  

The lowering price trend has resulted in the closure of high cost iron ore miners and the reduction of exports from non-traditional suppliers such as Indonesia, Mexico and Vietnam. Falling iron ore prices have impacted the second-quarter results. Mining giant Vale S.A. (NYSE:VALE-Free Report) reported a 15% plunge in its second-quarter profit due to the fall in prices of iron ore, its main product. However, its peers BHP Billiton Limited (NYSE:BHP-Free Report) and Rio Tinto plc (NYSE:RIO-Free Report) reported an increase in earnings mostly attributable to their cost reduction efforts which helped mitigate the effect of lower iron prices.

Threat of Oversupply Looms for the Iron Industry

There is a threat of oversupply in 2014 as major iron ore producers, Rio Tinto, BHP Billiton, Vale and Fortescue Metals Group Limited have ramped up production. They intend to continue exploring for iron ore in Australia despite lower growth forecasts for China and weaker iron ore prices, betting on continued strength in iron ore demand over the long term. Thus, Australia, the world's top exporter of iron ore, will rev up its shipments.

Brazil, the second largest explorer, will follow suit. Vale, which alone contributes almost 85% of Brazil's iron ore, is expected to increase its iron shipments by 22% in the second half of fiscal 2014 compared with the first half. In case this excess supply is not matched by adequate demand, it will expose the market to a risk of further decline in prices.

Per the World Steel Association, global apparent steel use is expected to increase 3.1% in 2014, following the 3.6% growth in 2013. In China, apparent steel use had soared 6.1% in 2013 on support from government infrastructure investment. However, this year the government's efforts to rebalance the economy will lead to 3% growth in apparent steel usage in 2014.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time!  Click here for your free subscription to Profit from the Pros.

Get the full Report on VALE- FREE

Get the full Report on BHP- FREE

Get the full Report on RIO- FREE

 Follow us on Twitter:  http://twitter.com/zacksresearch

Join us on Facebook:  http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
[email protected]
http://www.zacks.com

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Logo - http://photos.prnewswire.com/prnh/20101027/ZIRLOGO

SOURCE Zacks Investment Research, Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
The 17th International Cloud Expo has announced that its Call for Papers is open. 17th International Cloud Expo, to be held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, APM, APIs, Microservices, Security, Big Data, Internet of Things, DevOps and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding bu...
ElasticBox, the agile application delivery manager, announced freely available public boxes for the DevOps community. ElasticBox works with enterprises to help them deploy any application to any cloud. Public boxes are curated reference boxes that represent some of the most popular applications and tools for orchestrating deployments at scale. Boxes are an adaptive way to represent reusable infrastructure as components of code. Boxes contain scripts, variables, and metadata to automate proces...
In his session at @ThingsExpo, Lee Williams, a producer of the first smartphones and tablets, will talk about how he is now applying his experience in mobile technology to the design and development of the next generation of Environmental and Sustainability Services at ETwater. He will explain how M2M controllers work through wirelessly connected remote controls; and specifically delve into a retrofit option that reverse-engineers control codes of existing conventional controller systems so the...
To support developers and operations professionals in their push to implement DevOps principles for their infrastructure environments, ProfitBricks, a provider of cloud infrastructure, is adding support for DevOps tools Ansible and Chef. Ansible is a platform for configuring and managing data center infrastructure that combines multi-node software deployment, ad hoc task execution, and configuration management, and is used by DevOps professionals as they use its playbooks functionality to autom...
The 3rd International WebRTC Summit, to be held Nov. 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA, announces that its Call for Papers is now open. Topics include all aspects of improving IT delivery by eliminating waste through automated business models leveraging cloud technologies. WebRTC Summit is co-located with 15th International Cloud Expo, 6th International Big Data Expo, 3rd International DevOps Summit and 2nd Internet of @ThingsExpo. WebRTC (Web-based Real-Time Com...
It’s been proven time and time again that in tech, diversity drives greater innovation, better team productivity and greater profits and market share. So what can we do in our DevOps teams to embrace diversity and help transform the culture of development and operations into a true “DevOps” team? In her session at DevOps Summit, Stefana Muller, Director, Product Management – Continuous Delivery at CA Technologies, answered that question citing examples, showing how to create opportunities for ...
Puppet Labs has announced the next major update to its flagship product: Puppet Enterprise 2015.2. This release includes new features providing DevOps teams with clarity, simplicity and additional management capabilities, including an all-new user interface, an interactive graph for visualizing infrastructure code, a new unified agent and broader infrastructure support.
SYS-CON Events announced today that Pythian, a global IT services company specializing in helping companies leverage disruptive technologies to optimize revenue-generating systems, has been named “Bronze Sponsor” of SYS-CON's 17th Cloud Expo, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Founded in 1997, Pythian is a global IT services company that helps companies compete by adopting disruptive technologies such as cloud, Big Data, advance...
Skeuomorphism usually means retaining existing design cues in something new that doesn’t actually need them. However, the concept of skeuomorphism can be thought of as relating more broadly to applying existing patterns to new technologies that, in fact, cry out for new approaches. In his session at DevOps Summit, Gordon Haff, Senior Cloud Strategy Marketing and Evangelism Manager at Red Hat, discussed why containers should be paired with new architectural practices such as microservices rathe...
IBM’s Blue Box Cloud, powered by OpenStack, is now available in any of IBM’s globally integrated cloud data centers running SoftLayer infrastructure. Less than 90 days after its acquisition of Blue Box, IBM has integrated its Blue Box Cloud Dedicated private-cloud-as-a-service into its broader portfolio of OpenStack® based solutions. The announcement, made today at the OpenStack Silicon Valley event, further highlights IBM’s continued support to deliver OpenStack solutions across all cloud depl...
Puppet Labs is pleased to share the findings from our 2015 State of DevOps Survey. We have deepened our understanding of how DevOps enables IT performance and organizational performance, based on responses from more than 20,000 technical professionals we’ve surveyed over the past four years. The 2015 State of DevOps Report reveals high-performing IT organizations deploy 30x more frequently with 200x shorter lead times. They have 60x fewer failures and recover 168x faster
SYS-CON Events announced today that IceWarp will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. IceWarp, the leader of cloud and on-premise messaging, delivers secured email, chat, documents, conferencing and collaboration to today's mobile workforce, all in one unified interface
Containers are not new, but renewed commitments to performance, flexibility, and agility have propelled them to the top of the agenda today. By working without the need for virtualization and its overhead, containers are seen as the perfect way to deploy apps and services across multiple clouds. Containers can handle anything from file types to operating systems and services, including microservices. What are microservices? Unlike what the name implies, microservices are not necessarily small,...
All major researchers estimate there will be tens of billions devices - computers, smartphones, tablets, and sensors - connected to the Internet by 2020. This number will continue to grow at a rapid pace for the next several decades. With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo, November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Learn what is going on, contribute to the discussions, and e...
This Enterprise Strategy Group lab validation report of the NEC Express5800/R320 server with Intel® Xeon® processor presents the benefits of 99.999% uptime NEC fault-tolerant servers that lower overall virtualized server total cost of ownership. This report also includes survey data on the significant costs associated with system outages impacting enterprise and web applications. Click Here to Download Report Now!