Iron ore prices have bottomed out amid tight market supply: Vale

• Global iron ore miner Vale sees demand for high-quality ore in China rising
  
  
• Vale focusing on green mining technologies
  
  

The iron ore market downturn is expected to end as the effects of China's Covid-19 lockdowns and real-estate difficulties have been factored in, observed an executive at Vale, a Brazilian mining giant and the world's second-largest iron ore supplier, underscoring that demand for high grade ore from China will increase.

The iron ore industry saw a surge in the first half of 2021 (H1CY21). However, it is currently facing challenges. Iron ore futures have fallen 40% since their March peak as global inflation remains high, the Federal Reserve tightens monetary policy, and recession fears weigh on iron ore prices.

"The good news is that it can only get better from here," Luciano Siani, head of strategy and business transformation at Vale SA, said. Due to the tight market supply, iron ore prices are expected to remain around $95-$100 per tonne (t). "There is no ore available in the near future," Siani added.

The company intends to maintain its market share by becoming a leading supplier of high-quality iron ore. The average price of high-grade iron ore is around $85/t higher as compared to low-grade ore.

The company is working to develop more environmentally friendly mineral processing methods, such as green briquettes. Furthermore, the honeycomb can reduce greenhouse gas emissions in the steel production process by 10%.

Siani also stated that Vale intends to establish iron ore production centres in regions with lower energy costs, such as the United States and the Middle East, within the next 20 years.