- I analyze the major market events that could explain the recent correction in Vale and why my latest bullish thesis didn't play out.
- I believe that the 2% drop in iron ore production guidance resulted in too much market overreaction.
- China wants to reduce steel production to 2020 levels, but it has little chance of achieving this amid such rapid economic growth.
- Even the fact that Vale is a Brazilian company cannot explain such low market multiples at such a high level of growth.
- I recommend holding Vale and buying more in case of further drawdowns.
For further details see:
Vale: Upside Still Remains Enormous Even With China's Efforts To Reduce Steel Production