VALE per Cramer:
"HSBC is downgrading Vale on valuation, based upon an expected fall-off in Chinese demand for its iron ore, and the negative effects of a stronger Brazilian Real combined with a weaker dollar.
"On the other hand, Morgan Stanley? It upgrades Vale on valuation, better demand in non-Chinese markets like Europe, Brazil and the US, and potentially stronger iron ore pricing."
I would have thought that China's demand for iron ore (and scrap metal) already cratered, so would be baked into the stock already. The question is how much will worldwide demand increase as opposed to using or recycling what's already available?
Trash dump sites in the U.S. aren't filling up as quickly as they used to as people aren't buying as many new goods of all sorts, and they are keeping durable goods longer.
Durable goods wear out eventually, so have to be replaced at some point, but how soon? Also, I assume the clunkers from the cash for clunkers program are destined for the trash heap, so will increase the supply of scrap metal. The clunkers are being replaced with new cars, but typically lighter, smaller ones that use less steel.
Disclaimer: I don't own or follow VALE.
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