Roger Agnelli, the pattern of Vale, was well pleased to communicate to the market (adjusted Ebit) operating margin in 2009 of its assets in iron ore, which the Brazilian group is the world number one. Despite its significant reduction occurred in the last quarter (35.8, 51 per cent) a year earlier, its rate on all of the exercise of 46.6 allowed the company to partially erase the adverse effects on the overall operational profitability became negative margins of its non-ferrous activities (-3,6) and coal (-20,8).
However, Vale delivered annual accounts less solid than those of the most experienced competitors, BHP Billiton and Rio Tinto. The profitability of the carioca group in 2009 has spun at 26, compared with 41.9 a year earlier. Of Rio Tinto has emerged over the same period, 30 (in the sense of the Ebitda). The business of BHP Billiton, only calculated margin on the second half of last year, is set at 38. In the last six months of 2009, the Vale has not reached 26. Several analysts have not hesitated to judging the performance of the Brazilian firm "poor".
Despite his fierce will of diversification, Vale became a group very dependent activities of iron ore. But even in this field, something didn't work, especially in the last quarter. Its operating margin tumbled to 17.4 while prices in the spot of this mineral resource out with 100 dollars per tonne on the decisive market, China. On the last three months of 2009, Vale sold to Chinese customers 30.3 million tonnes of ore, against 40 million the previous quarter.
Maintain its dominant position
At the same time, always a quarter to the other, the average cost of marketed ore production increased sharply from 19.2 dollars per tonne to 26.9 $. Several elements have determined this inflation: energy costs, labor and subcontracting; technical problems; prices granted to third-party suppliers of ore and the appreciation of the Brazilian currency. Factors that Roger Agnelli must correct quickly. Point to monitor, the group admitted that do not have the means to 2012 to increase its offer in significant proportions, as its largest construction projects will work in full only in 2012 at the earliest. In the meantime, Vale will have to fight hard to meet Chinese demand by preserving its relatively dominant position in this market to the joint offensive of BHP Billiton and Rio Tinto. They actively preparing the merger of their Australian operations in iron ore, which should be completed in the year.
Roger Agnelli predicted for 2010 the maintenance of high levels of ore volumes imported by the Chinese. At the beginning of the year, the market gives him reason. On the Chinese domestic market, the iron ore is currently processing around 130 dollars per tonne. Vale, in 2009, sold this resource at an average price of $ 56.
According to Hu Kai, analyst at UC361, BHP Billiton would agree with several Chinese Steelworkers on an increase of 40, approximately 84 dollars per tonne, iron ore contract prices in 2010. 2009 Contract, which applies to deliveries to March 31, he suffered a decline in the third from the previous, fixing some 60 dollars per tonne. The decline of 25 in January of Chinese imports of this raw material is not significant because it corresponds to a period of downturn marked by celebrations of Chinese new year.
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