Brazil's Vale targets soaring Indian steel demand to offset China slowdown

Vale (VALE3.SA), a Brazilian mining giant, is preparing itself to capitalise on a boom in demand from India, which could double its steel production by the end of the decade.

According to Reuters, Chief Executive Gustavo Pimenta stated that the company expects increased sales to India and other Asian countries to compensate for sluggish demand in China, where steel output has plateaued at roughly 1 billion metric tons per year and may decline in the future years.

"India has 1.6 billion people, has surpassed China, and needs massive infrastructure investments, which means a lot of steel," Pimenta said in an interview at Vale's headquarters in Rio de Janeiro.

He went on to say that India's steelmaking capacity might increase to around 300 million tons in the next five to seven years, highlighting the scope of possibilities for Vale's high-grade iron ore.

Vale's ore, which is known for its high quality, combines well with India's lower-grade indigenous supply, Pimenta added.

"We add quality to the Indian mix. As steel output increases, we anticipate significant growth opportunities."

This year, India is set to import over 10 million tons of Vale's iron ore, up from nearly none just a few years prior.

Although this is still a modest fraction compared to China, which accounts for over 60% of Vale's total revenues, it signifies a significant shift in the company's market balance.

Shifting focus beyond China

While China is set to remain the world's largest steel manufacturer, Pimenta said Vale no longer expects expansion there. "We do not see growth ahead."

Chinese production will most likely remain constant, if not shrink, he said, contrasting the flat Chinese market with India's 12% annual steel output growth.

Beyond India, Vale sees increased demand from other Asian economies.

Sales to Vietnam, for example, are expected to reach 8 million tons in 2025, which is significantly more than in previous years.

The company's approach reflects a broader shift toward emerging nations, where industrialisation and infrastructure spending are rapidly increasing.

Strong quarter sets stage for “Vale Day”

Vale’s solid third-quarter results — highlighted by 5% sales growth and its strongest iron ore output since 2018 — have set the stage ahead of the company’s long-term strategy update, which will be presented at its “Vale Day” investor event in New York on December 2.

While Pimenta declined to discuss new production targets, he said the company will detail projects aimed at expanding iron ore and copper capacity across its core Northern System operations.

Vale plans to invest 70 billion reais ($12.95 billion) through 2030 in its “Novo Carajás” program in Brazil, which includes a project to lift annual iron ore capacity by 20 million tons. The initiative is roughly 80% complete and is expected to start operating in late 2026.

“As we explore more of Carajás, we get increasingly optimistic about its potential,” Pimenta said. “At Vale Day, we’ll give investors more visibility and confidence.”

The company also reiterated its target of doubling copper production by 2035.