(Adds detail on balancing free cash flow, iron ore price and Vale share price)
BRASILIA, April 6 (Reuters) - Brazilian miner Vale SA said on Wednesday it was close to balancing its free cash flow for 2016, helped by a reduction in capital spending for the year to $5.5 billion, as the world's largest iron ore producer battles a fall in commodity prices.
Vale previously said in December it was planning to invest $6.2 billion this year.
In a presentation filed with the securities regulator, Vale said it had nearly balanced cash flow through greater capital discipline that allowed it to save about $3 billion over 2015 and 2016, as well as asset sales forecast to generate as much as $5.5 billion.
Vale admitted falling commodity prices had eroded its ability to generate cash, but said it expected the oversupply in the iron ore market to ease this year. The spot price of iron ore .IO62-CNI=SI was $53.80 per tonne on Wednesday, up 25 percent this year but still down by more than half since early 2014.
Preferred shares in Vale, its most traded form of stock, were down 0.7 percent at midday in Sao Paulo on Wednesday. (Reporting by Silvio Cascione and Stephen Eisenhammer; Editing by Chizu Nomiyama and Jonathan Oatis)