The MySteel 62% Australian iron ore fines price added another 2.5% on Friday to US$100.35 per tonne, a fresh five-year high.
Vale said Gongo Soco had been closed since 2016, but its dam was just 1.5km from housing. The alert level was raised to 2 in February and to 3 in March.
"It should be noted that there are no technical elements so far that point towards an eventual slide of the northern slope of the Gongo Soco mine, which could act as a trigger for a breach of the Sul Superior Dam," Vale said.
"Even so, Vale is reinforcing the alert and readiness level for a worst-case breach scenario."
Vale said it would distribute leaflets and broadcast information on local radio to inform local communities.
An evacuation drill was held on the weekend.
"Vale reiterates its commitment to the region's residents and will keep them informed about the next actions and events that involve their safety," the company said.
"The pit and the dam are monitored 24 hours a day."
It is estimated more than 300 people were killed in late January when a dam at Vale's Córrego do Feijão mine collapsed.
Marex Spectron research analyst Hui Heng Tan said short-term supply conditions were bearish, while he was "marginally bearish" on short-term demand due to weaker steel prices and margins.
"Short-term macroeconomic conditions remain bullish. Downstream steel demand (manufacturing and construction) remains firm, with the latest construction data reflecting improving construction activities," he said.