Vale: EU Steel Production Is Cratering, Which Counter Intuitively Is A Positive

Jan. 11, 2023 11:13 AM ETVale S.A. (VALE)6 Comments
Zoltan Ban profile picture
Zoltan Ban


  • The EU steel industry seems set to shrink dramatically, squeezed by environmental policies, and a seemingly permanent energy crisis situation that makes production costs unsustainable.
  • Vale is mostly shielded from the kind of problems faced by companies that have extensive exposure to Europe, given its mostly Americas-based production infrastructure.
  • The prospects of the European steel industry being decimated should help to keep global steel prices relatively high, which should counterintuitively keep iron ore prices high as well.

Roll of galvanized steel sheet at metalworking factory

Vladimir Zapletin

Investment thesis: There are growing signs that the European steel industry can potentially collapse, becoming just a shell of itself. Vale (NYSE:VALE) is shielded from the problems facing companies that have business ties exposure to the

Vale mineral sales and the realized price


Steel rebar market price chart

Trading Economics

EU steel production this century

EU steel production (Trading Economics)

EU steel exports & imports

International Trade Administration

This article was written by

Zoltan Ban profile picture
My name is Zoltan Ban,  I have a BA in economics. I am a personal investor with over a decade and a half of active trading experience.

Disclosure: I/we have a beneficial long position in the shares of VALE either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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