Iron ore weakness to continue into 2025 and beyond, says Fitch Solutions’ BMI
Looking beyond 2024-2025, BMI analysts maintained their view that iron ore prices will likely follow a multi-year downtrend.
JPMorgan on Friday upgraded Vale (NYSE: VALE) to overweight from a previous neutral investment rating.
Analyst Rodolfo Angele said the miner is undervalued compared with its peers.
“Current iron ore prices are being supported by improved sentiment on China reopening and robust steel output,” Angele said in a September 1 report. “Current valuation looks discounted as the stock has de-rated, currently down 27.2% year-to-date, and has been outperformed by iron ore.”
JPMorgan raised its price target on Vale to $16 from $15 a share.
According to the financial institution, the Brazilian miner had a very challenging start to the year, marked by low volumes, operating challenges, and high costs, but said the “coming quarters should look better.”
Steel overproduction in China represents a potential catalyst for shares, JPMorgan said.
Chinese iron ore imports are forecast to rise to 106.1 million metric tons in August, according to Refinitiv vessel-tracking data, while commodity analysts Kpler have them pegged at 108.1 million.
If the customs data aligns with the forecasts, it would be the strongest month for iron ore imports this year and a strong gain from the official figure of 93.48 million tons.
Shares of Vale rose 4.1% by 11:22 a.m. EDT. The miner has a market capitalization of $62 billion.
Related: Vale starts producing test loads of iron ore briquettes
(With files from Reuters)
