A top executive from Vale, speaking to an annual industry gathering in Singapore, is warning competitors that the rally is unsustainable and according to global director of iron ore marketing and sales Claudio Alves the Brazilian giant is "prepared to operate at any price level" reports Bloomberg:
“We’ll have to prepare for tougher periods. We still see some additional capacity coming into the market."This will present some pressure in terms of price […] but we'll be on the left side of the [cost] curve.”
Vale's not-so-secret weapon in the current and coming price wars is called S11D. The $17 billion Carajas Serra Sul mine expansion and railway project in northeastern Brazil is 85% complete. According to Alves, S11D may produce between 30 million and 40 million metric tonnes next year and reach 80% of capacity by 2018.A
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