- The FOMC meeting held on 16th June has sparked fear among mining company investors as the strengthening dollar and declining commodity prices pose threat to mining companies' bottom line.
- This article examines Vale's risk exposure to the strengthening dollar and found that it has no net negative impact on Vale's bottom line.
- Should the strengthening dollar adversely impact Vale's bottom line, Vale still has the best margins and remains the most viable choice among the world's largest mining companies.
- We retain Vale’s price target of $27 as iron ore is currently priced slightly above the underlying assumption price level of $212.
- Should iron ore suffer a timber-like decline back to 2020 price levels of $150, Vale's price target should be readjusted back to $22.
For further details see:
A Strengthening Dollar Should Have No Net Negative Impact On Vale's Profitability