Shares of Vale, the Brazilian iron ore miner, have dropped by 3.2% as investors express concerns about the impact of China’s economic difficulties on the demand for their main product. The shares are currently priced at 65.70 reais, equivalent to $12.96, which represents a 24% decrease from the end of last year.
Chinese Government Stimulus Measures Dominate Growth Figures
While China’s GDP figures for the third quarter were slightly better than expected, they also revealed that a significant portion of the growth was driven by government stimulus measures rather than organic demand. This news has caused worry among investors, as they fear that it may not be sustainable in the long run. Sidney Lima, an independent stocks analyst based in São Paulo, explains that the real estate sector in China has also witnessed a decline, further adding to the concerns of investors. This is particularly troubling as the construction industry heavily relies on steel, with iron ore being a key component of this alloy.
For further information, contact Jeffrey T. Lewis.