Trends Driving Our $7 Price Estimate For Vale

The company has been battling a subdued iron ore pricing environment over the past year or so. Benchmark 62% Fe iron ore fines prices stood at $63 per dry metric ton (dmt) at the end of February, around 47% lower on a year-over-year basis. As a result of the fall in iron ore prices, Vale?s adjusted EBITDA margin stood at 24.1% in Q4 2014, as compared to 33.1% in the corresponding period of 2013. As a result of the persisting weakness in the global economic outlook, as well as in market condition...