Brazil-based Vale (Public, NYSE:VALE), the world’s largest iron-ore miner, is forecast to regain lost market share as it is able to increase exports of the raw material faster than it’s major competitors BHP Billiton (Public, NYSE:BBL) and Rio Tinto (Public, NYSE:RTP).
Analysts forecast that Vale will boost production by 24% and it’s market share will increase to 28%. Still down from it’s 2007 peak of 31%, the company will reopen shuttered plants and will continue to invest in increasing production capacity.
Chinese demand strong and still growing.As iron-ore demand returns from the US, Japan & Europe in addition to the blistering pace of steel production coming out of China, demand is expected to rise to a record 1 billion tons this year. Global recovery is still in it’s early stages and we will see much more upside in natural resource prices from here.
This year should be an excellent year for natural resources as the commodities giants scramble to meet demand. This is the beginning of one of the greatest bull markets of all time in commodities and the race to see who can grow the fastest.
Strategic acquisitions are the fastest way to meet demand.
Investing in capacity expansion and strategic acquisitions are the keys to competitive growth which is now the sole focus of commodities giants. Acquiring smaller producers is the “instant gratification” they are looking for and this trend will only increase it’s pace in 2010 and beyond.