The news broke Wednesday afternoon and caused Brazilian stocks, including Vale, to decline.
The mining company also suffered from a drop in iron ore prices thanks to a falling credit gauge in China. Iron ore with 62% iron content delivered to Tianjin fell 0.9% to $93.20 per dry ton, according to Bloomberg. This marks the lowest price since June 20. China’s measure of new credit declined in July, which has caused some concern that demand will slow in the Asian nation.
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The stock was down 2.47% to $13.41 at 11:18 a.m.
Separately, TheStreet Ratings team rates VALE SA as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate VALE SA (VALE) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself."