Brahm

What's Brewing Between China, Vale, and the Baltic Dry Index

Long term the Vale gambit may have some strong currency behind it. However near or intermediate term as the global slowdown unrolls, Vale may have its swagger somewhat crimped. Don't forget there are about half a dozen global suppliers still around who may just step in to provide some of the slack stemming from Vale's hardball negotiating tactics. Excess capacity may just be there to checkmate Vale's ploys as auto sales cool and infrastructure needs are moderated due to strains on national budgets or kittys.Note that companies such as Mittal are also busy acquiring ore capacity and developing new production to reduce ore purchases from outside suppliers.