Vale(US:VALE) Benzinga·2025-12-03 11:07Market Overview - Iron ore is projected to maintain positive momentum towards 2026, with an average price forecast of $95/ton, slightly down from $97/ton in 2025 due to increased seaborne supply and macroeconomic pressures in China [1] - China's annual iron ore consumption is expected to peak before the end of the decade, driven by a structural shift towards less steel-intensive sectors and the global adoption of low-carbon steelmaking [4] Demand Side Analysis - China's official manufacturing PMI has contracted for the seventh consecutive month, recording a value of 49 in October, indicating persistent weakness in factory activity [3] - A decline in new-home prices suggests a subdued outlook for construction steel, which directly impacts iron ore demand [2][3] Supply Side Analysis - Major iron ore producers are operating with stability, but Vale SA has moderated its medium-term production expectations, reducing its 2026 forecast to 335–345 million tons from a previous range of 340–360 million tons [5] - Vale has revised its capital expenditure guidance to $5.5 billion after two downward revisions, reflecting a disciplined investment strategy in light of market dynamics [6] - Vale is shifting focus towards copper as a growth opportunity, planning to produce 700,000 tons of copper annually by 2035 through a $2 billion joint venture with Glencore in Ontario's Sudbury Basin [7]