Click here to close now.


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.,

Industry: Industrial Metals


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 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:

Join us on Facebook:

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]

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 for information about the performance numbers displayed in this press release.

Logo -

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
SYS-CON Events announced today that JFrog, maker of Artifactory, the popular Binary Repository Manager, will exhibit at SYS-CON's @DevOpsSummit Silicon Valley, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Based in California, Israel and France, founded by longtime field-experts, JFrog, creator of Artifactory and Bintray, has provided the market with the first Binary Repository solution and a software distribution social platform.
Cloud computing delivers on-demand resources that provide businesses with flexibility and cost-savings. The challenge in moving workloads to the cloud has been the cost and complexity of ensuring the initial and ongoing security and regulatory (PCI, HIPAA, FFIEC) compliance across private and public clouds. Manual security compliance is slow, prone to human error, and represents over 50% of the cost of managing cloud applications. Determining how to automate cloud security compliance is critical...
As enterprises capture more and more data of all types – structured, semi-structured, and unstructured – data discovery requirements for business intelligence (BI), Big Data, and predictive analytics initiatives grow more complex. A company’s ability to become data-driven and compete on analytics depends on the speed with which it can provision their analytics applications with all relevant information. The task of finding data has traditionally resided with IT, but now organizations increasingl...
Culture is the most important ingredient of DevOps. The challenge for most organizations is defining and communicating a vision of beneficial DevOps culture for their organizations, and then facilitating the changes needed to achieve that. Often this comes down to an ability to provide true leadership. As a CIO, are your direct reports IT managers or are they IT leaders? The hard truth is that many IT managers have risen through the ranks based on their technical skills, not their leadership ab...
Apps and devices shouldn't stop working when there's limited or no network connectivity. Learn how to bring data stored in a cloud database to the edge of the network (and back again) whenever an Internet connection is available. In his session at 17th Cloud Expo, Bradley Holt, Developer Advocate at IBM Cloud Data Services, will demonstrate techniques for replicating cloud databases with devices in order to build offline-first mobile or Internet of Things (IoT) apps that can provide a better, ...
As more and more data is generated from a variety of connected devices, the need to get insights from this data and predict future behavior and trends is increasingly essential for businesses. Real-time stream processing is needed in a variety of different industries such as Manufacturing, Oil and Gas, Automobile, Finance, Online Retail, Smart Grids, and Healthcare. Azure Stream Analytics is a fully managed distributed stream computation service that provides low latency, scalable processing of ...
You have your devices and your data, but what about the rest of your Internet of Things story? Two popular classes of technologies that nicely handle the Big Data analytics for Internet of Things are Apache Hadoop and NoSQL. Hadoop is designed for parallelizing analytical work across many servers and is ideal for the massive data volumes you create with IoT devices. NoSQL databases such as Apache HBase are ideal for storing and retrieving IoT data as “time series data.”
“The Internet of Things transforms the way organizations leverage machine data and gain insights from it,” noted Splunk’s CTO Snehal Antani, as Splunk announced accelerated momentum in Industrial Data and the IoT. The trend is driven by Splunk’s continued investment in its products and partner ecosystem as well as the creativity of customers and the flexibility to deploy Splunk IoT solutions as software, cloud services or in a hybrid environment. Customers are using Splunk® solutions to collect ...
SYS-CON Events announced today that Agema Systems 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. Agema Systems is the leading provider of critical white-box rack solutions to data centers through the major integrators and value added distribution channels.
SYS-CON Events announced today that Alert Logic, the leading provider of Security-as-a-Service solutions for the cloud, has been named “Bronze Sponsor” of SYS-CON's 17th International Cloud Expo® and DevOps Summit 2015 Silicon Valley, which will take place November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Alert Logic provides Security-as-a-Service for on-premises, cloud, and hybrid IT infrastructures, delivering deep security insight and continuous protection for cust...
SYS-CON Events announced today that Interface Masters Technologies, provider of leading network visibility and monitoring solutions, will exhibit at the 17th International CloudExpo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Interface Masters Technologies is a leading provider of high speed networking solutions focused on Gigabit, 10 Gigabit, 40 Gigabit and 100 Gigabit Ethernet network access and connectivity products. For over 20 ye...
Mobile, social, Big Data, and cloud have fundamentally changed the way we live. “Anytime, anywhere” access to data and information is no longer a luxury; it’s a requirement, in both our personal and professional lives. For IT organizations, this means pressure has never been greater to deliver meaningful services to the business and customers.
Clutch is now a Docker Authorized Consulting Partner, having completed Docker's certification course on the "Docker Accelerator for CI Engagements." More info about Clutch's success implementing Docker can be found here. Docker is an open platform for developers and system administrators to build, ship and run distributed applications. With Docker, IT organizations shrink application delivery from months to minutes, frictionlessly move workloads between data centers and the cloud and achieve 2...
Clearly the way forward is to move to cloud be it bare metal, VMs or containers. One aspect of the current public clouds that is slowing this cloud migration is cloud lock-in. Every cloud vendor is trying to make it very difficult to move out once a customer has chosen their cloud. In his session at 17th Cloud Expo, Naveen Nimmu, CEO of Clouber, Inc., will advocate that making the inter-cloud migration as simple as changing airlines would help the entire industry to quickly adopt the cloud wit...
Cloud Foundry open Platform as a Service makes it easy to operate, scale and deploy application for your dedicated cloud environments. It enables developers and operators to be significantly more agile, writing great applications and deliver them in days instead of months. Cloud Foundry takes care of all the infrastructure and network plumbing that you need to build, run and operate your applications and can do this while patching and updating systems and services without any downtime.