Vale CEO Gustavo Pimenta stated that rising energy and freight costs have made 10% of global seaborne iron-ore supply unprofitable. This equates to approximately 160 million tons of production.
Producers have already halted 15 million tons of output due to the adverse cost environment. These pressures coincide with iron-ore futures recently falling to a two-year low.
Pimenta expects a price recovery as higher-cost marginal operations exit the market to restore balance. While Chinese demand remains solid, the CEO noted further growth in markets including India and Vietnam.