NEW YORK (TheStreet) -- Shares of Vale SA (VALE) hit a 52-week low of $11.96 on Friday after Moody's (MCO) said falling iron ore prices would continue to affect construction and mining stocks for the near future.
Iron ore prices have fallen by nearly 40% this year as large miners increase production while China's housing market has slumped. Benchmark iron ore prices for imports into China are trading at approximately $83.50 a ton, and Moody's expects prices to reach $85 to $95 a ton for the rest of 2014.
But the firm also anticipates prices will increase to a range of $95 to $105 a ton in 2015 as high cost producers leave the market. Moody's also said lower growth in China and increased iron ore supply could limit the price increase.
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The firm noted lower prices are hurting local producers and would do so for the next six months to a year.
More than 23.5 million shares had changed hands as of 3:15 p.m., compared to the average volume of 18,092,800.
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 revenue growth, increase in net income and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and disappointing return on equity."