Vale ships record iron ore to China in Q1

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Shanghai.  May  8.  INTERFAX-CHINA  - Brazil's Vale, the world's largest
iron ore  producer,  shipped  34.63 million tons of iron ore to China in
the first  quarter  of 2009, which marks a quarterly record, the company
announced on May 6.
China's  imports  from  Vale in the first quarter surpassed the previous
high of  28.19  million tons for the third quarter of 2008, according to
Vale's first quarter report.
Vale attributed  the  record to a rebound in China's demand for minerals
and metals  and  a jump in sales due to more contracts with medium-sized
steel mills. In addition, Vale has also adopted a more flexible iron ore
pricing scheme, including provisional pricing.
Vale predicted     that     looser   credit   and   government-sponsored
infrastructure  investment  will  lead to an increase in domestic demand
and subsequently bolster China's economy over the next three quarters.
However,  iron  ore  demand  outside  of China remains extremely weak as
Japan, the world's second-largest importer, reduced its purchases in the
first quarter by 34.4 percent year-on-year.
Iron ore  sales  to  China now account for 66.5 percent of Vale's total,
compared  with  8.2  percent  for  Japan, 6.7 percent for Brazil and 6.1
percent for South Korea, according to the report.
Although  iron  ore  shipments  to China hit a record high, Vale's gross
revenue  for  the  first quarter dropped by 27.2 percent from the fourth
quarter  of 2008 to $5.42 billion because of the drop in both prices and
sales volumes of iron ore and other mineral products.
Vale said  its  iron  ore revenues fell by $555 million over that period
due to the decline in prices.
-GD