Vale VALE ticked higher in Monday’s trading as Scotiabank upgraded the iron ore and base metals producer to Sector Outperform from Sector Perform with a $16 price target, citing the recent correction that has dragged down the stock price to where it began the year and as the shares reach a point where a new price rally should materialize.

Scotiabank’s Alfonso Salazar thinks Vale’s VALE next near-term catalyst could be a normalization of the oceanic freight cost to China and a meaningful improvement of the netback price for Brazilian iron ore miners, which the analyst expects to happen over the coming quarters and the freight cost to return to ~$20/ton by year-end 2027 compared to recent levels that topped $40.

Longer-term, Salazar said he…