(Reuters) – Brazil’s Vale SA , the world’s No. 1 producer of iron ore, on Thursday posted its third straight quarterly loss under pressure from falling prices of the commodity as demand growth from China slows.
The miner reported a net loss of $3.2 billion in the first quarter, compared with a net profit of $2.4 billion in the same period last year. The result compares with a forecast net loss of $2.4 billion according to a Reuters poll.
The first-quarter loss was wider than that in the third and fourth quarters of last year. Vale has been hit by a tumble in the price of the main steel-making ingredient .IO62-CNI=SI, which is near its lowest in a decade having fallen 47 percent in the past 12 months.
Prices have fallen due to huge new capacity from Brazil and Australia that is beginning to flood the market, just as growth slows of Chinese demand for steel.
As well as weaker iron ore prices, Vale said the depreciation of the Brazilian real against the dollar had cost the company $3.02 billion in the quarter.
The loss comes despite raising $1 billion through the sales of a gold-streaming contract and a stake in the Belo Monte hydroelectric dam in Brazil’s Amazon in the quarter.
Vale reported adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $1.6 billion, a fall of 60.5 percent on the same period last year.
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