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In recent weeks, iron ore prices have been falling in Chinese ports, amid the slowdown in activity in the second largest economy on the planet and with an eye on the promise of reducing steel production in the country.
The government still seems determined to meet the goal of reducing carbon emissions into the atmosphere, and reducing steel production on Chinese soil is critical to achieving that goal.
The devaluation of the commodity has become even more intense amid the series of lockdowns that have been implemented in China recently due to the zero-tolerance policy for covid-19.
Following this movement, the share prices of Brazilian mining and steel companies, such as the giants Vale (VALE3), Usiminas (USIM5) and Gerdau (GGBR4), also fell.
However, Chinese President Xi Jinping encouraged Brazilian investors by advocating robust investments in infrastructure as part of China’s plan to resume economic growth, at a meeting on Tuesday (27).
The news is positive for Brazilian mining and steel companies as it signals that the prices of metallic and steel commodities should remain at high levels with the resumption of demand in China.
The shares of companies in these sectors contributed to the rise of the Ibovespa the day before, with Gerdau and Vale being among the highest in the trading session, with appreciation of 6.01% and 5.35%, respectively.
Read on ‘Investigando o Mercado’ (exclusive to UOL Investimentos subscribers): information about the results of the North American technology giant Alphabet, owner of Google.
A hug,
Rafael Bevilacqua
Levante’s Chief Strategist and Founding Partner
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