Vale, one of the world’s largest mining and metallurgical companies, highlighted its main competitors.
In principle, the world market for iron ore and pellets is extremely competitive on a global level.
The main factors that affect competition are price, quality and variety of products offered, reliability, operating costs and transportation costs.
With respect to Asia, Vale’s main competitors are in Australia and include subsidiaries and affiliates of BHP Billiton, Rio Tinto and Fortescue Metals Group.
In its own opinion, Vale is competitive in the Asian market for two reasons. First, steel mills generally seek to obtain types (or blends) of iron ore and pellets that allow them to generate the desired end product in the most economical and efficient way.
Vale’s iron ore has low levels of impurities and other properties that generally result in lower processing costs.
For example, in addition to its high content, the alumina content of its iron ore is very low compared to Australian ores, reducing coke consumption and increasing blast furnace productivity. The latter, in turn, is especially important during periods of high demand.
When market demand is strong, Vale’s quality differential often stands out among its customers.
Second, steel mills often develop business relationships based on the reliable supply of a specific mix of iron ore and pellets.
With regard to Europe, its main competitors are Luossavaara Kiirunavaara, ArcelorMittal Mines Canada, Iron Ore Company of Canada, a subsidiary of Rio Tinto, Kumba Iron Ore Limited and Société Nationale Industrielle et Minière.
Vale is competitive in the European market for the same reasons as it is in Asia, but also because of the proximity of its port facilities to European customers.
Finally, regarding Brazil, the Brazilian iron ore market is also competitive and includes several small iron ore producers.
Some steel companies, such as Gerdau, Companhia Siderúrgica Nacional, Vallourec Tubos do Brasil, Usiminas and ArcelorMittal also have iron ore operations.
Although price is relevant, quality and reliability are also important competitive factors.
Vale believes that its integrated transportation systems, high-quality ore and technical services make it a strong competitor in the Brazilian market.
Selected financial indicators of Vale
With regard to pellets, Vale’s main competitors are LKAB, Iron Ore Company of Canada, Ferrexpo Plc, ArcelorMittal Mines Canada and Bahrain Steel.
Vale is one of the world’s largest iron and nickel ore producers.