Shares of Vale SA, the world’s largest iron-ore miner, rallied the most in a month as the company presses ahead with plans to cut production and boost profit.
Vale will withdraw output of iron ore by 25 million metric tons starting this month, Peter Poppinga, the company’s executive director for ferrous and strategy, said at an industry conference in Sao Paulo.
The cuts will come from its lower-quality products at its mines in south and southeast Brazil and from third-party purchases, he said.
“Our mantra is not volume at any cost anymore, it’s to maximize margins,” Poppinga told reporters at the event. “It doesn’t mean shutting mines, it means optimizing some production flows at plants.”
The Rio de Janeiro-based miner is moving to trim low-quality output as it focuses on boosting profit amid what it sees as an oversupplied market in 2015, and one that will probably be in surplus next year, Poppinga said. Shares of Vale earlier reached a 10-year low on Monday and have slumped more than 20 percent since the end of December as a bear market for iron ore deepened.
Vale jumped 3.9 percent to 14.97 reais at 2:44 p.m. in Sao Paulo, after gaining as much as 5.4 percent, the most since June 2, on Poppinga’s comments. The stock lost 46 percent in the past 12 months.
The company said in April it was considering cutting output by 30 million tons, and the reduction announced Monday is part of that plan, Poppinga said, adding that the company still seeks to reach its output target of 340 million tons in 2015.
For the rest of this article, click here: http://www.bloomberg.com/news/articles/2015-07-13/vale-rallies-most-in-month-amid-plans-to-cut-iron-ore-supplies