Iron ore exports by Brazilian mining giant Companhia Vale do Rio Doce will likely fall 17% to 270 million metric tons in 2009, UBS Pactual says in a report released Thursday.
UBS previously forecast the world's leading iron ore exporter would ship 326 million tons this year.
The bank also said it expected Vale's 2008 iron ore exports would fall to 289 million tons, down 7% on its previous estimate of 310 million tons.
"Lower volumes versus 2009 should come as no surprise due to the significant slowdown in steel production both in Q2 and 1H09," UBS said in a statement.
However, all the news wasn't negative as UBS says that it expects improved demand in 2010, with volume rising to 303 million tons.
UBS maintained its assumptions on commodity prices in 2009. Iron ore prices will fall 40% this year and 5% in 2010, it added.
As a consequence of falling iron ore and other metal prices and volumes, UBS sees Vale net income falling 16% to $13.69 billion in 2008, compared to an earlier forecast of $16.22 billion.
The outlook for 2009 forecast is gloomier, with Vale's net income seen at $8.9 billion, down 18% compared to an earlier forecast of $10.87 billion.
Source: CNN
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