"
Vale SA has a somber message for anyone betting on iron ore prices returning to the heady days of 2011.
The world’s biggest producer of the steel-making ingredient is prepared to unleash as much as 50 million metric tons of spare capacity to balance the market if prices get too high, Chief Executive Officer Fabio Schvartsman said.
High prices would lure inefficient producers back into the market and risk a repeat of past excesses that led to $1 trillion in value destruction, he said Wednesday in an interview with Bloomberg Television from the New York Stock Exchange, where Vale held its annual investor day.
“It was clear to see during the super-cycle, when in an unsustainable way companies made too much money and they didn’t know what to do with the money,” he said.
Schvartsman’s sense of market responsibility contrasts with the producer bravado of just a few years ago, when they battled for market share amid seemingly insatiable demand from Chinese mills. Now the industry catchphrases are value over volume and
flight to quality.
As Vale shifts focus to high-grade deposits in northern Brazil’s Amazon region, it expects to produce 390 million tons next year and cap output at 400 million tons over the following four years, well below its 450 million-ton capacity.
China has been paying a premium nearly
five times greater than what it was two years ago for high-quality ore, which helps mills there boost margins and comply with a government anti-pollution push."
So fellow mushrooms (owners/investors) we're supposed to sit by and allow our management teams control the IOP at levels closer to the low than the high, so the IOP doesn't get to levels that sees real value being transferred to our shareprices therefore real capital gains , denying us the opportunity to sell on a high to maximise profits because management would have that much money that
they wouldn't know what to do with it?
A couple of points to those that seek to control the IO market.
It's illegal in the Western Democracies.
Secondly, why would a CEO conspire to stop a high in the IOP thus transferring to a high in their share price thus not allowing their investors to excercise their judgement to maximise their capital? And visa versa denying opportunity to buy cheaply on occasions?
Stupid!
And this,
"High prices would lure inefficient producers back into the market and risk a repeat of past excesses that led to $1 trillion in value destruction, "
Only to those who decide to stay invested and await the next high! Surely!
Which this guy wants to prevent (the next high in IOP therefore sp's)?
Thirdly,
Can you believe this statement?
“It was clear to see during the super-cycle, when in an unsustainable way companies made too much money and
they didn’t know what to do with the money,” he said.
Could the answer be replacing bad management and allowing the opportunity for good management to spend that income wisely?
Could that be the answer!
Fairdinkum, if VALE investors don't get rid of this idiot they deserve the whealth destruction that's coming their way! Imo.
(20min delay)