Free-falling iron ore prices have cost Brazilian producer Vale SA nearly $40 billion in market value and the title of Latin America's most valuable company.
Vale's 32% collapse from a late-July peak makes the Rio de Janeiro-based miner cheaper than MercadoLibre Inc., an e-commerce giant currently worth $90 billion after a strong fintech performance last quarter.
With a new economy platform taking the top spot from a 79-year-old raw material producer, the change of guard could be consolidated as China's efforts to clean up its heavy polluting industrial sector ship iron ore below $100 per metric ton.
UBS Group AG cut Vale by two percentage points to buy-sell last week, while Bradesco BBI sees risks in a volatile commodity price environment with a downward slope. If iron ore averages $90 next year, Vale's earnings before items could miss the consensus estimate by 38%.
The change in Vale's fortune could have been even more drastic had it not been for the $13.8 billion investor payments announced so far this year.
Comments
No comment yet.