By JOHN LYONS and PAUL KIERNAN

Protesters rallied in Rio de Janeiro on Tuesday, a day after the biggest demonstrations in decades altered the political landscape in Brazil.

SÃO PAULO—A day after the biggest demonstrations in decades gripped Brazil, this South American nation awoke on Tuesday to a shifting political landscape, with protest leaders seeking to turn Monday's venting of national frustration into a long-term movement, and a wary political class searching for footing in a country that has voiced a powerful call for change.

Brazilian President Dilma Rousseff, a former Marxist guerrilla and Brazil's first female president, sought to empathize with the protest movement, declaring that she, too, is an agent of change seeking to correct many of the long-standing injustices protesters criticize.

"Brazil awoke today stronger, the greatness of the demonstrations yesterday proves the importance of democracy," Ms. Rousseff said in Brasilia, where on Monday hundreds of protesters swarmed the roof of the modernist Congress building. "Those who went to the streets gave a message that they want more citizenship, better schools, better hospitals, more participation. It was a repudiation of corruption, and careless use of government money."

In a season of mass protests in several of the developing capitals of the world, Ms. Rousseff's bid to align with protesters contrasts sharply with heavier-handed tactics of other leaders, such as Turkish Prime Minister Recep Tayyip Erdogan, who has faced mass protests in recent days.

Protesters Flood Brazilian Streets

See photos from massive countrywide demonstrations Monday, fueled by widespread frustration about the rising cost of living, crime and corruption.

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Thousands of students stood in the gardens of the National Congress in Brasilia, Monday.

The situations are different. For one, the Brazilian protesters haven't targeted Ms. Rousseff personally and are simply marching, not occupying land marked for development, as in Turkey. What's more, Brazilians are increasingly critical of use of force by police. By most accounts Brazil's protest movement ballooned after police beat protesters during a series of marches last week.

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All the same, the appearance of massive demonstrations in multiple cities is hardly good news for Ms. Rousseff, who is up for re-election next year, or her leftist Workers Party, which came to power a decade ago with a message of change. Ms. Rousseff flew to São Paulo on Tuesday evening to meet with her predecessor, Luiz Inácio Lula da Silva, who built his own career leading mass protests and strikes. No details of the meeting were released.

"Protesters are asserting their sacred civil right to raise their voices and demand respect from authorities and by a self-serving political class that has become an embarrassment to itself and to the nation," said Paulo Sotero, director of the Brazil Institute at the Woodrow Wilson Center for Scholars.

A sea of people, in the tens of thousands, filled São Paulo's central Avenida Paulista again Tuesday evening, with smaller protests in other cities. In São Paulo, the mostly peaceful protests ended in sporadic looting late Tuesday, with a television news truck set ablaze.

Thousands of protesters took to the streets again on Wednesday morning, blocking a principal highway into the city and adding to a sense that the movement still has significant momentum. Organizers are calling for another mass march Thursday.

Protests that began last week against a bus-fare increase exploded into massive countrywide demonstrations, with tens of thousands of people railing against everything from over spending to build World Cup stadiums to corruption and crime. Matthew Cowley reports. Photo: AP.

The protests began last week among students in São Paulo over a small fare increase for buses that many here consider inadequate. São Paulo's mayor said Tuesday he was considering canceling the increase and mayors of other cities who also proposed fare increases have already done so.

But indignation has already expanded to a litany of long-standing Brazilian gripes: Rising cost of living, political corruption, crime, and the cost of next year's World Cup soccer tournament when compared with the poor condition of schools, hospitals—and public buses.

For some Brazil observers, the massive but diffuse protests represented a kind of "awakening" of a new Brazilian middle class that has expanded tremendously during a decadelong economic boom, and is now demanding greater accountability from its political class.

In São Paulo and other cities, marchers chanted "the people woke up" to the tune of a popular soccer cheer.

Pedro Pereira, 30 years old, a lawyer who showed up at the Rio protest march in a suit, said the demonstrations appealed to him at first because of his daily bus commutes. But now, the poor buses are largely symbolic of broader frustrations with what he called political "impunity."

"The complaints are millions, and it's not all going to get fixed in just a few years," said Mr. Pereira, who voted for Ms. Rousseff in 2010 hoping she was a candidate for change.

"The fare increase was a small drop in a full bucket," said Rodrigo Vidaurre, 24, a student who was protesting in Rio. "We won't stop. Even if we get this with the price of the bus and have no raise, we won't stop. We will fight against inflation, corruption, we'll fight. We won't stop."

According to a Datafolha poll, 77% of the some 65,000 protesters who gathered to march in São Paulo Monday are college educated, and 71% were protesting for the first time. The vast majority, 84% said they had no political affiliation—though antipathy for elected officials was hard to miss.

Rodrigo Lima, 17, marched in a soccer jersey of Brazil's archrival Argentina. He wore it because Rio's Mayor Eduardo Paes recently joked that he'd kill himself if Argentina wins the World Cup next year.

For some observers, the protest represents middle-class frustration with rising costs of living even as the economy slows at the end of a long commodities boom.

There is no single voice for the protest movement. But there are plenty of glaring examples of what is bothering middle class sensibilities. Take political corruption. Earlier this year, the Supreme Court convicted around two-dozen politicians in a vast vote buying scheme. None are in jail—and several are back in congress making laws.

Meantime, many Brazilians live in congested cities where prices have soared so much that meals, movies and Starbucks coffee often costs more here than in New York. Even in an economic expansion, salaries didn't keep pace.

Fancy new stadiums built to host next year's World Cup soccer tournament here in far-flung cities appear to some as frivolous expenses in a country where the roads, trains and hospitals remain emblems to Brazil's poorer past.

"Brazil is famous for being a people that are too passive, and now we are demonstrating that that's wrong," said Miguel Paschoarelli, 18, a student marching late Monday in Rio.

Write to John Lyons at john.lyons@wsj.com and Paul Kiernan at paul.kiernan@dowjones.com

A version of this article appeared June 19, 2013, on page A16 in the U.S. edition of The Wall Street Journal, with the headline: Middle-Class Brazilians Find a Voice.

Breakaway Brazil via EPA

Richard Swanson of Seattle died May 14 when he was struck by a car alongside Highway 101 in Oregon.

The driver Oregon police say fatally struck a man trying to dribble a soccer ball 10,000 miles from Seattle to Brazil for the World Cup has been arrested. 

Scott Van Hiatt, of Neskowin, Ore., was arrested Monday on a charge of criminally negligent homicide, said Lincoln City Police Chief Keith Kilian. 

Lincoln County Jail

Scott Van Hiatt of Neskowin was arrested on a charge of criminally negligent homicide in the death of Richard Swanson.

Richard Swanson, of Seattle, planned to dribble the ball for more than a year through 11 countries before reaching Sao Paolo, Brazil, where the opener of the World Cup soccer tournament will be played June 12, 2014. 

He was hit from behind by a pickup while walking south along busy U.S. 101 on May 14, just a few days shy of his 43rd birthday. Hiatt stayed at the scene and has been cooperative with the investigation, police said. 

Soccer lover's fundraising trek ends in tragedy

Hiatt was indicted by a Lincoln County grand jury last week. He is jailed on $50,000 bail pending arraignment Tuesday, said Lincoln County District Attorney Rob Bovett. 

Swanson began his intercontinental journey in Seattle on May 1. He was partly promoting the Berkeley, Calif.-based One World Futbol Project, which donates durable blue balls to people in developing countries. 

The day of his death, Swanson posted a video on his Facebook page that shows him walking along the beach, kicking his blue soccer ball. He said he was looking forward to his journey south along U.S. 101. 

"Very exciting moment today," he said. "I'm going to be on the ocean for thousands of miles. This is my first taste of it and I'm very excited about this." 

In an earlier interview with a Seattle TV station, Swanson joked that he hoped he wouldn't be run over on the coastal road. 

"I'll be on Highway 101, but I'll also try to utilize any of the trails that run along the coast, just trying to get off the beaten path, there's a lot of cars and just not get run over," he told Q13 FOX News. 

Kilian said police do not believe Swanson was dribbling the ball at the time he was hit. He declined to elaborate on the circumstances that led to the crash. 

The commission is led by evangelical pastor Marco Feliciano of the Social Christian Party, who has been accused of homophobia and enraged activists by calling AIDS a "gay cancer" in a tweet. His appointment as head the Commission for Human Rights and Minorities in the lower house of Brazil's Congress was fiercely opposed by gay and human rights groups.

The measure approved Tuesday seeks to lift a prohibition on psychologists treating homosexuality that was established by the Federal Psychology Council. The ban has been in effect since 1999.

"In practice, (the initiative's) result would be that a person over 18 years of age, responsible for his actions, who is homosexual and wants to reorient his sexuality, can be attended by a psychologist," said lawmaker Joao Campos, a member of the evangelical bloc of Brazil's lower house.

Feliciano had tried for weeks to put the "gay cure" initiative before the commission but had failed as opponents maneuvered to block a vote. The initiative was passed Tuesday amid a low turnout by commission members.

The psychologists' council had called on commission members to vote against it.

"Today psychology, as wells as other scientific disciplines, recognize that sexual orientation is not a pathology that should be treated, it is not a perversion nor a disorder nor a behavioral disturbance. Since this is the case, we cannot offer a cure, and that is an ethical principle," said council member Huberto Verona.

The initiative still must be debated by other committees before going to the full Chamber of Deputies and the Senate for votes.

Jean Wyllys, Brazil's first openly gay lawmaker, expressed confidence the initiative would not make it through the legislative process.

Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Brazilian leaders in Sao Paulo say they are reversing a 10-cent hike in bus and subway fares that has sparked widespread protests across the nation.

Sao Paulo Mayor Fernando Haddad and Sao Paulo state Gov. Geraldo Alckmin said at a joint news conference Wednesday that the fare increase is now reversed.

However, it was not clear what impact the action would have on the protests that have broken out in several Brazilian cities.

The protests have evolved into communal outcries that have moved well beyond the original demand that public transportation fares be lowered.

Protests are continuing in Rio's sister city Niteroi and in northeastern Brazil.

Article written by Linda Yueh

• More from Linda

Large-scale protests in Brazil have rocked one of the largest and most prominent emerging economies.

On the face of it the cause is a small rise in bus fares, which has mushroomed into a range of complaints - including corruption and a lack of investment in social services compared with spending on the World Cup and Olympics.

The real cause is likely to run much deeper.

Brazil's economy has slowed down considerably over the past year, expanding by less than 2%. It feels worse by comparison with a strong decade of growth - helped by the commodity boom of the 2000s - and relatively low inflation.

For years Brazil has been feted as one of the major emerging economies - one of the fabled Brics, alongside China, India and Russia.

To top it off, it was chosen to host both the football World Cup and the next Olympics.

Brazil became a destination for money seeking a better return.

Its key interest rate has averaged 8-10% in the past decade, which has offered the highest returns in the world (after taking into account inflation) for many of the years since the global crisis.

This inflow of foreign money and the country's success selling commodities led its currency to surge, which helped to keep a lid on inflation (although it did pose other problems).

But, now the picture has changed. With a few words, the Fed chairman, Ben Bernanke, has raised the prospect that the US central bank's cheap cash injections - which have fuelled billions of dollars of inflows into emerging economies - could begin to taper off in the next few meetings.

This has caused money to leave emerging economies (see my posts on the Great Reversal part I and part II). And Brazil has been hard hit.

The country's stock market has fallen by more than 20% and become a bear market. Its currency, the real, hit the weakest level in four years, at around 2.14 per US dollar.

This cheaper currency makes imports more expensive and tends to be inflationary. So much so that the central bank has just raised interest rates to combat price rises - despite the slowing of the economy.

It's a difficult economic position to be in.

Plus, when growth slows, the signs of fracture become more apparent.

One of the enduring difficulties for Brazil and other Latin American countries is that they have the most unequal societies in the world.

As measured by the Gini coefficient - where 0 is perfect equality and 1 means that one person has all of the money - Brazil's inequality has fallen during the past decade. But it remains above 0.5, which is the wrong side of the 0.4 level that is associated with instability.

Perhaps Brazil is now confronting the next challenge for these successful emerging economies that have grown well during the past decade or so.

There are now more than 130 million people in the middle class in Latin America (and I'll be writing more about that in my post tomorrow). This larger middle class tends to demand more from the government, particularly social services and re-distribution of income.

Brazil - and other countries - are likely to find that it is easier to satisfy those demands during a boom. It's much more challenging now.

But, with the worst protests on Brazilian streets in decades, it may be that this is the right time to grasp that potentially painful nettle.

Brazilian cement and concrete producer Votorantim Cimentos is plowing ahead with its multi-billion initial public offering this week. The offering will be the second-largest in the world this year, becoming a key test of investors’ perceptions of Brazil and the broader emerging markets.

“The (IPO) plan is on track. Of course, this time investors are more concerned, not so much about the company, but with the country’s economic conditions,” said a banker with knowledge of the deal, who declined to be named for this article. The person declined to discuss investor demand for the company’s shares so far.

Votorantim Cimentos, Brazil’s largest producer of heavy building materials such as cement and concrete, wants to raise up to 10.26 billion Brazilian reais ($4.8 billion), and the deal is expected to be priced on Wednesday. If it goes through, it will be the world’s second largest IPO this year, behind the 11.5 billion reais raised from another Brazilian deal, the spinoff of BB Seguridade SA , the pensions and insurance unit of Banco do Brasil SA , in April.

In its way is the rapid decline in enthusiasm for all things emerging markets, and Brazil in particular. The prospect of slightly slower growth in China, combined with the possibility that the U.S. Federal Reserve may begin “tapering” its easy-money policies, has led many money managers to pull back from their exposure in emerging markets, mostly because they have to pay down the cheap dollar loans before rates start to go up.

At the same time, investors have become frustrated with Brazil. Economic growth has been muted over the last two years, and looks set to disappoint again this year, with latest forecasts pointing to sub-2.5% GDP expansion. Government policy has been roundly criticized, for too much intervention, either directly or indirectly, as well as mixed signals on interest rates, inflation, public spending and the currency. Last week, Standard Poor’s changed its outlook on Brazil’s sovereign rating to negative, raising the possibility of a downgrade, after years of upward momentum.

Votorantim will be hoping that investors can distinguish between the immediate problems facing the broad economy, and the longer-term growth prospects for companies that manage to navigate these difficult times successfully.

“I think that they [companies] are doing a good job operating in a difficult environment, and there are very good opportunities for continued economic growth in Brazil,” said Geoffrey Pazzanese, a portfolio manager at Federated Investors, who oversees $636 million in equities with 9% of its assets in Brazilian stocks. Pazzanese bought shares in BB Seguridade, but said he won’t buy Votorantim’s shares, as he’s not interested in the cement industry. “I believe much of the investor pessimism for Brazil has to do with the government’s policies, which have attempted to engineer certain solutions rather than letting the free market work.”

Votorantim Cimentos — controlled by local billionaire family Ermirio de Moraes – plans to offer a total of 540 million units, including an overallotment, with each unit expected to price between BRL16 and BRL19.00. Each unit consists of one common share and two preferred shares. Investors can reserve shares in Votorantim until Tuesday. Trading is expected to begin on Thursday.

Of the total offer, around 70% will be new shares and 30% will be sold by the Moraes family through a secondary offering. The company did not reveal what the offering will represent as a percentage of the company’s total ownership.

Votorantim plans to use the proceeds to expand and add more products in Brazil, as well as for potential acquisitions of heavy building materials companies or assets outside Brazil. It already has operations in the U.S., Canada and elsewhere in Latin America.

Itau BBA Morgan Stanley JPMorgan Chase Credit Suisse BTG Pactual HSBC Goldman Sachs Deutsche Bank Bradesco BBI Bank of America Merrill Lynch, Banco do Brasil and Banco Votorantim are coordinating the offering.

President Dilma Rousseff has said people have engaged in "information terrorism" through the media. But it is evident that the country needs some structural reforms to help revive growth.

We walk you through five key talking points on Brazil's economy:

Inflation - Brazil's inflation reached 6.5% in 12 months through May. Strong private consumption, supply shocks, "17% average exchange rate depreciation in 2012," easy fiscal and monetary policy, and a rise in import duties, all drove inflation higher.

The concern is that rising inflation will hurt real wages and consumption.

BBVA Research

Wage inflation and competitiveness - "As a consequence of both the sharp increase in domestic wages (due to a tightening of the labor market) and the appreciation of the exchange rate, labor costs in dollars increased sharply (more than 300% since the end of 2002), matching productivity gains and then eroding Brazil’s competitiveness," according to BBVA Research.

BBVA Research

Credit growth hits a wall - Credit-fueled consumption growth has hit a wall in Brazil. The government needs to address the issue but it's unclear if they will considering elections are coming up in 2014.

Societe Generale

GDP growth is slowing  - Brazil's economy grew a mere 0.9% in 2012. Rising wages hurt the Brazilian economy as the country lost competitiveness. The credit-fueled consumption growth maxed out also hurting economic growth. Along with other issues like poor infrastructure and high taxes.

BBVA Research

The current account deficit is deteriorating - "The current account is deteriorating as real exports of goods and services declined sharply in Q1 against a big jump in imports." But the decline in balance of payments (BOP) is nearly done, according to Societe Generale.

Morgan Stanley analysts see no reason to panic about the decline in BOP, and attribute most of the rapid decline to "accounting errors from the customs authority."

Societe Generale

SEE ALSO:  The Chinese Credit Bubble In Four Charts

SAO PAULO (AP) -- Protesters massed in four Brazilian cities Monday in what they hoped would be their biggest demonstrations yet against a hike in public transport fares, stoking fears of more clashes with police and raising questions about security during big events like the current Confederations Cup and a papal visit next month.

With the nation's reputation on the line, authorities vowed to avoid the sort of bloody confrontations that shocked Sao Paulo last week. Police commanders said publicly they would not fire rubber bullets during the protest or use riot police units.

Authorities said they would respond with force only if protesters destroyed property.

On Thursday in Sao Paulo, riot police charged into crowds of peaceful protesters, firing rubber bullets and tear gas and beating some demonstrators. Protest organizers said more than 100 people were hurt. Police only confirmed about a dozen injuries.

Police used tear gas and rubber bullets again Sunday when several hundred protesters marched near Maracana stadium before a Confederations Cup match between Italy and Mexico, part of an eight-team warm-up tournament for next year's World Cup finals in Brazil.

But there were no clashes Monday as thousands of people protested before a Confederations Cup match between Tahiti and Nigeria in the city of Belo Horizonte, where police helicopters buzzed overhead and mounted officers patrolled the stadium area. Police put the number of protesters at around 20,000, according to a report on the G1 news website. Earlier in the day, demonstrators erected several barricades of burning tires on a nearby highway, disrupting traffic.

The protests were set off by a 10-cent hike in public transport fares, but they have clearly moved beyond that issue to tap into widespread frustration in Brazil about a heavy tax burden, politicians widely viewed as corrupt and woeful public education, health and transport systems.

Monday's protest in Sao Paulo got off to a calm start late in the day, with some demonstrators turning out in clown costumes complete with red rubber noses. Samba percussion circles, including one led by a drag queen in a blond wig and sporting oversized dollar-sign earrings, pounded out competing rhythms as the crowd of several hundred grew steadily thicker.

Demonstrator Marcos Lobo, a 45-year-old music producer, said earlier police brutality had persuaded him to come out for Monday's demonstration.

"I thought they (the protests) were infantile at first because of my preconceived notions," Lobo said. "Then I saw the aggression."

Another protester, Manoela Chiabai, said she came out to express her dissatisfaction with the status quo.

"Everything in Brazil is a mess. There is no education, health care - no security. The government doesn't care," the 26-year-old photographer said. "We're a rich country with a lot of potential but the money doesn't go to those who need it most."

Demonstrations also were being held in the capital of Brasilia and in Rio de Janeiro. Thousands of protesters, many dressed in white and brandishing placards and banners, turned out in both cities. Many people in Rio left work early to avoid traffic jams downtown.

In Brasilia, several thousand people under heavy police escort marched on the Esplanada dos Ministerios thoroughfare that cuts between rows of government ministry buildings.

Ariadne Natal, a professor at the University of Sao Paulo whose research focuses on violence, said protesters want to "take advantage of this moment when we have foreign visitors, when the world's press is watching, to showcase their cause."

"The problem we've seen is that the police action is trying to prevent these protests," she said. "What we need to figure out is how the protests as well as the big events can be carried out democratically."

Brazilians have long accepted malfeasance as a cost of doing business, whether in business or receiving public services. Brazilian government loses more than $47 billion each year to undeclared tax revenue, vanished public money and other widespread corruption, according to the Federation of Industries of Sao Paulo business group.

But in the last decade, about 40 million Brazilians have moved into the middle class and they have begun to demand more from government. Many are angry that billions of dollars in public funds are being spent to host the 2014 World Cup and 2016 Olympics while few improvements are made elsewhere.

Protests are routine in Brazil, but few turn violent, and security experts say the demonstrations aren't the main danger for the hundreds of thousands of visitors who will descend on Brazil from now through the Olympics.

"The biggest threat to those visiting Brazil for the Confederations Cup and other events we'll host remains petty crime," said Paulo Storani, a security consultant and former commander of an elite police unit in Rio.

For the Confederations Cup, Brazilian officials are using drones, thermal cameras and thousands of troops to patrol the six stadiums hosting matches in six different cities.

Storani and other security experts said visitors will be most vulnerable once they venture away from secured areas, and may even face increased risks of petty crime because many police have been called off their regular patrols to focus on the stadiums and protests.

However, Joe Biundini, whose FAM International Group provides security details to executives attending the Confederations Cup, warned of the danger of escalating violence if the government doesn't negotiate with demonstrators.

"If the government doesn't sit down with them it could get worse in future matches," Biundini said, calling the police response to Sunday's protest in Rio excessive.

"It was a peaceful protest and they responded with a very heavy hand," he said. "I'm a little concerned that the government of Rio is pulling out a heavy fist and that might just create more violence in the future."

Copyright 2013 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Vale SA (VALE5), Brazil’s largest exporter, said further local currency depreciation could counter cost rises and a slowdown in Chinese iron-ore demand as it seeks to regain market share from Rio Tinto Group and BHP Billiton Ltd. (BHP)

The real, the worst-performing emerging-market currency in the past three months, probably will weaken to about 2.40 from 2.15 per U.S. dollar, bolstering Brazil’s competitiveness, said Jose Carlos Martins, Vale’s executive director for ferrous and strategy. China’s iron-ore and steel demand growth is set to slow to about 5 percent from 10 percent in the first five months of the year, he said.

“The Brazilian currency will devalue further,” Martins, 63, said in a June 14 interview at the company’s Rio de Janeiro headquarters. “The slowdown in China is negative, devaluation is positive because not only our costs in dollars will be reduced but also investments will be lower.”

Vale is seeking to return to profit growth and boost investor confidence by cutting costs, selling assets and focusing on the iron-ore business, its most lucrative unit. The company, the worst-performing major mining stock this year, posted first-quarter profit that surpassed analysts’ expectations for the first time in eight quarters.

The real lost 7.8 percent against the dollar in the past three months through yesterday to the weakest level in four years as faltering economic growth and speculation the U.S. Federal Reserve will pare back monetary stimulus lures money away from Latin America’s biggest economy. The Brazilian currency depreciated 0.9 percent to 2.1712 per dollar today, the weakest level since May 2009.

Forecasts Cut

May industrial production in China, where Vale sells almost 50 percent of its iron ore shipments, grew a less-than-forecast 9.2 percent from a year earlier, the weakest increase in the first five months of the year since 2009. China’s economic expansion held below 8 percent for the past four quarters, the first time that has happened in at least 20 years.

The world’s biggest metals consumer is expected to expand 7.8 percent in 2013, according to the median estimate in an economists Bloomberg survey last month, down from an 8 percent pace forecast in April. The World Bank reduced its forecast to 7.7 percent from 8.4 percent in a June 12 report.

China can grow 7 percent to 8 percent for the next two or three years as the economy shifts toward consumption and away from infrastructure, said Martins, who estimates he’s spent a total of a year and a half in China since joining Vale in 2004.

“As they are moving more to consumption, it’s less steel-intensive,” he said. “That’s a fact of life.”

Share Tumble

Shares in the world’s third-largest mining company declined 31 percent in Sao Paulo this year through last week, under-performing the 19 percent drop by Brazil’s benchmark Ibovespa Index (IBOV). BHP and Rio Tinto, the largest mining firms, fell 13 percent and 21 in Sydney and London, respectively. Vale gained 0.4 percent to 28.40 reais in Sao Paulo trading today.

Iron-ore prices dropped as much as 31 percent from a 16-month high in February on weaker demand from China. The steel-making ingredient gained 1.4 percent to $113.60 a ton on June 14, based on an index compiled by The Steel Index Ltd. Prices may weaken to $100 a ton by 2016 after averaging $125 a ton this year, according to data compiled by Bloomberg.

Future Prices

China’s decision last week to scrap a licensing system for iron-ore imports may increase market transparency, reduce volatility and signal that the government of President Xi Jinping is taking a more pro-business approach, Martins said during the interview.

Vale sold 34 percent of its iron ore at spot prices on delivery at port in the first quarter, compared with 2 percent last year, the company said in an April 25 presentation. Clients in China are increasingly buying at future prices to avoid the steel-making ingredient’s fluctuations during the 45 days it takes to delivery from Brazil, Martins said.

“There is no risk for customers and so they are fulfilling their contracts,” he said.

To contact the reporters on this story: Juan Pablo Spinetto in Rio de Janeiro at jspinetto@bloomberg.net; Laurie Hays in New York at lhays1@bloomberg.net

To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net

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Vale Sees China Slowdown Blunted by Brazil Currency Depreciation

Dado Galdieri/Bloomberg

Dump trucks transport mined iron ore at Vale SA's Brucutu mine in Barao de Cocais, Brazil.

Dump trucks transport mined iron ore at Vale SA's Brucutu mine in Barao de Cocais, Brazil. Photographer: Dado Galdieri/Bloomberg