RIO DE JANEIRO—Brazilian mining giant Vale SA, the world’s largest iron-ore producer, sees China’s appetite for the commodity picking up this year on the back of government stimulus measures, possibly helping to offset a wave of new supply.
Vale Chief Executive Murilo Ferreira said Thursday that on his most recent trip to China, in March, he saw a healthier iron-ore market than he had seen in a year and a half.
“I arrived from my trip to China happy,” Mr. Ferreira said on a conference call with analysts. “My perception is that…2016 is much better in China than we could have imagined, for example, in August of last year.”
The Chinese economy’s slowdown last year came at the worst possible time for many mining companies, crimping demand for commodities just as their long-term expansion projects were coming to fruition. That caused iron-ore prices to sink as low as $37 per metric ton in December from nearly $200 in 2011.
Vale, which is racing to complete a $14.3 billion iron-ore mine in the Brazilian Amazon, was forced to draw $3 billion from a revolving-credit line in January as it faced a cash crunch following a disastrous dam collapse at one of its joint ventures in November. Ratings firm Moody’s Investors Service downgraded the company’s once-sterling debt to junk in February.
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