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"The drop in Chinese iron ore prices is temporary."

Murilo Ferreira, president of Vale, Brazil's largest mining company, said that the fundamentals of the Chinese economy remain solid, and the decline in the price of iron ore is due to changes in that country's credit policy.

Murilo Ferreira, chief executive officer of Vale SA, speaks during an interview in Rio de Janeiro, Brazil, on Tuesday, July 19, 2011. Vale SA, the world's largest iron-ore producer, will have discipline in making acquisitions, Ferreira said, a week later (Photo: Valter Lima)

Mariana Branco - Agência Brasil

Brasilia – The fall in iron ore prices in China is transitory, said today (21) Murilo Ferreira, president of Vale, Brazil's largest mining company and exporter of the commodity. Ferreira spoke about the matter after leaving a meeting with the Minister of Mines and Energy, Edison Lobão.

According to Ferreira, the fundamentals of the Chinese economy remain solid, and the decline in the value of the product is due to changes in that country's credit policy. "Recently, there has been a stricter credit policy, and steel mills have certainly been affected. This is a monetary policy decision. As credit positions are not as readily available as before, steel mills end up working with lower inventory levels, but it is a temporary situation," he assessed.

Iron ore is a significant part of Brazil's export portfolio, and China is the largest importer of this commodity in the global market. Iron ore prices have been falling in the international market, negatively impacting the product's performance in Brazil's trade balance.