Vale (VALE3) posted biggest daily drop in three months as crude faltered; Steelmakers lead Ibovespa losses

On a bad day for the Brazilian stock exchange, mining and steel stocks were among the main losses at Ibovespa that day. Companies reflect the decline in iron ore prices in world markets. the valley (VALE3Its worst daily drop in three months. Shares closed down 4.3% at R$85.65.

On the Dalian Stock Exchange, China’s iron ore futures fell 4.54%, For the fourth consecutive year, which also affects steel prices. Investors were still concerned about government interventions in the market. The authorities want to avoid price gouging and are asking iron ore traders to release excess stocks.

Data from consultancy SteelHome showed that port stocks of raw materials in China were at 156.35 million tons on February 11, hovering around a three-year high. Last year, the Chinese government pressured iron ore stocks to avoid manipulation.

“The point is that iron ore has gone up really fast and fell very fast in the past few weeks,” says João Lorenzi, partner and commodity analyst at Encore.

For him, the decline in the miner’s stake is exaggerated. The market is very afraid that China is trying to artificially lower prices. Nobody knows if they will do that. They’ve tried it three times in the last year, and it worked for three weeks and then it’s back again.

For Lorenzi, Valley’s primary bias is positive. Other analysts Also see fall as subtle.

The analyst explains that spreading fear and weak demand for steel in Brazil are affecting steelmakers in today’s session. CSNA (CSNA3) is down 5.85%, the largest drop on the Ibovespa Index. Next came Metalúrgica Gerdau (GOAU4) and gerdau (GGBR4), dropping 5.39% and 5.32%, respectively. Usiminas (USIM5) by 4.07%.

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