China stainless steel mogul fights to avoid a second collapse
A debt crisis is threatening the future of one of the world’s top stainless steel producers, Jiangsu Delong Nickel Industry.
Vale, the second largest mining company, fell to the lowest in over six weeks today, after reporting its third consecutive drop in quarterly profit driven by declining iron-ore prices and output.
According to Reuters, Vale’s revenues are down $3 billion — a 44% drop from the same time last year.
The collapse was largely attributed by Vale to a slow-down in Chinese demand for iron-ore and shipment interruptions due to heavy rains. Despite the company said that work stoppages at its Sudbury mines following the deaths of three workers in under a year wouldn’t affect its results, they did affect that bottom line.
“The first quarter is generally the weakest of the year from a financial and operational perspective,” the company said. “This year, the strong rain volumes in Brazil deepened the seasonal effect on sales and costs, that along with lower prices for iron-ore and pellets cut our operating margins and profit.”
Profit was 18% lower than in the fourth quarter of 2011.
The cost of goods sold by Vale rose 2% to $5.69 billion as the company hired more workers. Sales, general and administrative expenses grew 26% to $529 million, Vale said in the statement.
