Vale S.A. (NYSE:VALE) Positioned for High Quality Ore Demand

Vale S.A. (NYSE:VALE) produces a high quality of iron ore, and being the largest iron ore producer in the world, is positioned strongly to take advantage of demand for the product.


Deutsche said, "We have assigned a 20% premium to Vale's NPV, mainly based on a strong pipeline of projects, the improved outlook for iron ore demand and rising sector valuations.

"Vale is the world's largest producer of iron ore and iron ore pellets. The company's revenue composition by destination has historically been well diversified: -40% of gross revenues from Asia, -25% Europe, -20% South America and -13% North America. Vale should benefit from the wide price gap between spot and contracted benchmark prices and the expected price increases for coal will require steelmakers to use higher quality iron ores such as those sold by Vale."

Deutsche maintains their "Buy" rating on Vale, which closed Tuesday at $35.33, up $0.59, or 1.70 percent. Deutsche raised their price target on them from $42 to $48.