Morgan Stanley (NYSE:MS) says China appears to be easing tightening measures to manage growth, and Vale SA (NYSE:VALE) responded Tuesday by rising over 6 percent in New York on the news.
Vale is the leading producer of iron ore in the world, and would benefit strongly if the assertion by Morgan Stanley proves to be true. It would of course help their competitors like BHP Billiton (NYSE:BHP) and Rio Tinto (NYSE:RTP), along with those in the steel industry as well.
The problem seems to be there is no proof of the assertion, only speculation.
It would be a major change in policy, which seems to have barely started to be implemented, making it a stretch as to it being true. This hasn't stopped analysts and others from jumping on the bandwagon and acting as if this is already a story that has happened.
Vale is reportedly running its iron ore plants at full capacity in anticipation of the possibility, and the company director, Claudio Alves claims China is starting to replenish their steel stockpiles.
This may or may not mean they are changing policy, as rebuilding stockpiles could be from prior use which isn't scheduled for huge building projects going forward.
If this is found to be true, just about every precious metal and companies producing them would shoot up in price. For now, we should wait to see if this is really the case, as many assertions have been made but no proof offered.