Investopedia: Vale Still All About China

In some respects, Brazilian iron giant Vale (NYSE:VALE) should be sitting pretty. After all, it controls huge iron ore reserves, has a pretty compelling cost structure and has successfully grown a non-ferrous business centered around nickel and copper.

On the other hand, there's just not enough demand from the Brazilian steel industry to change the fact that Vale rises and falls with Chinese demand. Making matters worse, the Brazilian government has not been shy about influencing (some might say "interfering") the company's internal operations. Although Vale's valuation is not really that extreme today, investors need to appreciate the risks that go with this name. (For more, see Earning Forecasts: A Primer.)

To read more, click this link:
http://stocks.investopedia.com/stock-analysis/2012/Vale-Still-All-About-China-VALE-BHP-RIO-CLF0221.aspx