(Image: Ievgen Postovyk/iStock)
A China decided to take from paper a package of stimuli that was enough for the Vale (ELECTION 3) shot up 11% between its year low and the last session.
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But for the Bank of Americaanother stock (and commodity) is more attractive.
According to analysts, the supply of copper is extremely tight after a series of outages, while demand continues to be buoyed by the green economy such as electric cars and solar panels.
As for the aluminumit benefits from the same triggers as copper and should be supported by Chinese restrictions on domestic capacity expansion.
In this context, the bank raised its recommendation for the role of CBA (CBAV3) from neutral to purchase.
For analysts, the company benefits from a more constructive view of aluminum and is traded at an attractive level of 3.1 times EV/Ebitda (firm value over operating results).
For the year, the company rose 22%.
Cautious view for iron ore
For the iron orethe game is different. The bank throws cold water on those who see a structural change in Chinamainly in the real estate market, the main consumer of the commodity.
“Meanwhile, iron ore stocks at Chinese ports remain high at 150 Mt, steel mill margins are tight and there is increasing supply ahead (i.e. Onslow, Vargem Grande, Capanema, Simandou), which together with lower crude steel production in China (-2-3% y/y in 2024-25), driving growing surpluses”, he says.
Analysts estimate that the price of iron ore will exceed US$110 a ton and then fall to US$90.
The recommendation for Vale is neutral. To CSN (CSNA3) e CSN Mineração (CMIN3)the recommendation is for sale, as well as Usiminas (USIM5).