Iron Ore: JP Morgan Says Buy Vale; SocGen Says Buy Rio Tinto; I Say... (VALE; RIO)

...There's no hurry.
First up, Barron's Emerging Markets Daily:

JP Morgan: Buy Vale As China Bids Up High-Quality Ore Premium

Choking in smog, China is pressuring its steel mills to use higher grade iron ore. As a result, premiums for high-quality iron ore has been on the rise. Financial Times reports earlier this week:

The price of Australia lump, as assessed by Metal Bulletin, is fetching a premium of between $17 and $18.6 a tonne over fines with 62 per cent iron content – the benchmark iron ore price for financial markets. Six months ago the premium was at $8 a tonne, while pellets with 65 per cent iron ore content are trading at a premium of $40-$42 a tonne to fines, up $10 in the same period.

That is good news for several major mining companies, including BHP Billiton (BHP), Rio Tinto (RIO) and Vale, which are among the top suppliers of high-grade ores.

J.P. Morgan analysts Rodolfo Angele, Mandeep Singh Manihani and Lucas Ferreira agree:
As iron ore prices weakened into ’14, iron ore miners such as Vale saw their share prices going down....MORE

While at Barron's Stocks to Watch:

Rio Tinto: Time to Buy?

Yes, says Societe Generale’s Abhishek Shukla and team, who still think Rio Tinto (RIO) could gain more than 30%.

So why is this a good time to buy Rio Tinto’s now that it’s dropped 9% thanks to falling iron prices? A big reason: Valuation. Shukla explains:

In our base case model, we assume iron ore prices in 2017e will be c. $42/tonne lower than the average price of 2013; we estimate consensus is also factoring in a decline in iron ore prices on the same scale. As a result, the recent fall in iron ore prices, even if not reversed, should result in downward revision to near term consensus earnings forecasts but should not put meaningful downside pressure on longer term earnings forecasts for Rio Tinto…MORE