Vale says iron ore sales brisk despite slower China
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RIO DE JANEIRO, May 21 (Reuters) - Brazilian miner Vale is selling iron ore about as fast as it can mine it despite a slowdown in the economy of China, its top customer, the company's head of investor relations said on Monday.
A string of economic indicators show China, the world's top iron ore consumer, is slowing at a faster-than-expected pace prompting its premier, Wen Jiabao, to call on Sunday for new measures that would bolster growth.
But Viktor Moszkowicz, head of investor relations at Vale, the world's biggest iron ore miner, said demand from the Asian giant was firm, while a Goldman Sachs analyst said China's falling stocks would soon prompt it to buy at a faster pace.
"We don't have any problem concerning orders, we continue to sell all the amounts the company is producing. The scenario we see continues positive," Moszkowicz said, speaking at the Rio Investors' Day investment seminar in the beachside city where Vale is based.
He was responding to questions about news that Chinese buyers were requesting delays to deliveries of orders they had made.
Signs are growing that the broader outlook for iron ore demand in the world's most populous country may not be so bright.
Traders have reported that some Chinese buyers have defaulted on deliveries of both coal and iron ore, suggesting the scenario is starting to sour for companies on the production side.
The price of iron ore has also fallen in the last few weeks, going from $150 a tonne about a fortnight ago to $135 by last Friday, Vale executives said.
At the investment event in Rio, the vice president of Brazilian steelmaker Usiminas, Ronald Seckelmann, said the company was scaling back its plans to expand its iron ore mining. The company had aimed to reach 29 million tonnes by 2015 but has cut this to a "more appropriate" 25 million tonnes, Seckelmann said.
Goldman Sachs analyst Marcelo Aguiar, who had chaired a discussion on the outlook for mining and steel at the event, told reporters he estimated iron ore prices would recover from current levels and hover around $150 a tonne on the spot market in the second half of the year.
He said prices were falling now due to the expectation that supplies would rise, not only from Brazil where heavy rains had temporarily slowed Vale's iron ore exports but also from India and Australia.
Aguiar said he expected Chinese demand to strengthen, not weaken, in the second half of the year because it was running down its stocks.
Vale's Chief Executive Murilo Ferreira and the director for ferrous metals, Jose Carlos Martins, said at a lunch event with journalists on Friday last week that they expected prices to recover in the second half.
Ordinary shares in Vale rose 3.2 percent on Monday to 36.85 reais.
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