Vale gains relevance in the economy with the increase in ore exports | Economy

Last year, foreign sales totaled 20.215 billion US dollars, or 8.4% of total sales in the country. Vale, according to the estimates of the Brazilian Association of Foreign Trade (AEB), accounts for between 70% and 80% of the quantity of the exported product.

"The company has acquired great importance and is today the second largest exporter of iron ore in the world," said AEB President, José Augusto de Castro.

The growth of the importance of iron ore in exports has occurred in the wake of China's growth. In the early 2000s, the Chinese economy has recorded growth rates of more than 10%. With the acceleration of the Chinese economy, demand for commodities has increased and soybean and iron ore producing countries – such as Brazil – have benefited from this expansion.

In 2001, for example, one ton of iron ore was priced at $ 19. In 2011, at the peak of the price, the price per tonne rose to $ 126. at a level of US $ 50 per tonne between 2017 and 2018.

Iron ore exports

Value of ore exported in recent years;

For the moment, it is still difficult to measure the concrete consequences for the consequences for the company of the damage caused by the rupture of the Brumadinho dam in Minas Gerais. The Córrego do Feijão mine produces 8.5 million tonnes of iron ore per year, which corresponds to 2% of Vale's iron ore production.

Between January and September 2018, the company produced 283,652 million tonnes of iron ore, an increase of 3.8% over 2017. The company's largest production is in the United States system. North. Production was 140,730 million tons.

"The impact as a whole remains difficult to measure," says MacroSector CEO Fabio Silveira. "The most complicated thing is that the accident amplified the disadvantages that society was already facing on the international scene," he said. "China slows down."

In the third quarter of last year, the company made a profit of R $ 5.753 billion and was the third most profitable company in the country, according to Economatica.

On the financial market, the damage is already considerable.On Monday (28), the company lost 70 billion rubles in market value.The rating agency Fitch also lowered the credit rating of the company from BBB + to BBB –

While it is still difficult to measure the magnitude of the impacts of the Brumadinho accident on the national economy, economists are certain that the economy of Minas Gerais must be affected intensely. "For the state of Minas Gerais, it is a very important company and a broken state," Otto Nogami, professor at Insper