Long-term, the deal could be viewed as the first step of a more disciplined approach to iron ore supply by aligning two of the world’s “big four” producers of the commodity.
The recent surge in prices of gold, oil and other commodities has come prematurely, says the bank, arguing that lower prices are needed for markets to rebalance.
Riding a rocketing iron ore price, market cap of Vale, Rio Tinto, BHP Billiton, Fortescue Metals and Anglo American gain a combined 54% since early February.