Bloomberg News

Vale Jumps to 20-Month High After Santander Boost

March 05, 2010

Vale SA (VALE5), the world’s biggest iron- ore producer, jumped to the highest price in 20 months in Sao Paulo trading after Banco Santander SA boosted its share price estimate by 28 percent.

Vale jumped 2.9 percent to 47.35 reais, the highest price since June 2008.

“We are reinforcing our bullish view on Vale on the back of the tighter than previously estimated iron ore market,” analyst Felipe Reis wrote in a note. “Once again the pricing power is all in the hands of miners who are currently in negotiations to determine referral prices in 2010.”

Prices for the steelmaking ingredient will likely jump 60 percent this year, Reis wrote. He previously estimated increases of 25 percent, according to the note. Vale sales will likely reach 310 million tons this year, up from an estimate of 302 million tons, he wrote.

Vale is seeking to increase iron ore prices for its domestic customers in Brazil by 40 percent in March and another 40 percent in April, Steel Business Briefing reported yesterday, citing people in the iron and steel industry.

Rival MMX Mineracao & Metalicos SA, the ore producer controlled by Brazilian billionaire Eike Batista, jumped 5.6 percent to 14 reais.

To contact the reporter on this story: Paulo Winterstein in Sao Paulo at

To contact the editor responsible for this story: David Papadopoulos at

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