Vale (VALE.US) is shifting strategy to provide more low-grade iron ore to meet the current demand in the steel industry, no longer focusing solely on the supply of high-grade steelmaking materials. Chief executive Gustavo Pimenta detailed the strategic shift during an investor event in New York on Tuesday, stressing the need for the company to adapt to the current market and enhance supply flexibility.

Traditionally viewed as a top-tier iron ore producer, Vale is the world's second-largest iron ore supplier (after Rio Tinto Group), based in Rio de Janeiro. However, Pimenta noted that while the company is known for its high quality, it must show greater flexibility in its operating strategy. "We have to be successful even in a low-profit environment when customers say they need more economical products," he emphasized to reporters. This strategy differs from the path taken by his predecessor, Eduardo Bartolomeo, who focused on boosting the supply of high-grade iron ore to help the steel industry reduce carbon emissions.

Vale executives analyzed that the steel industry is facing numerous challenges, causing it to deviate from its original carbon reduction path, which may take longer than expected. As a result, the industry may not always be able to bear the premium required to purchase Vale's high-grade ores.

Since taking over in October, Pimenta has made restoring competitiveness and cutting costs his top priorities. With concerns over supply overhang weighing on iron ore prices, Vale plans to maintain its iron ore production next year and lowered its long-term production forecasts for copper and nickel.

"It's a more pragmatic planning. We are committed to ensuring a good start for the new cycle and to delivering what we promised to the market in a stable and continuous way during my tenure," Pimenta said.