Production surpassed levels seen in the first quarter of 2023, though was lower than last year’s fourth quarter due to seasonal factors. — Bloomberg
RIO DE JANEIRO: Vale SA, the Brazilian mining giant, produced more iron ore than expected in its first quarter on better operational performance at its biggest mine.
The world’s No. 2 iron ore producer reported output of 70.8 million tonnes in the quarter, compared with the 68.2 million tonnes average estimate of analysts tracked by Bloomberg.
Production surpassed levels seen in the first quarter of 2023, though was lower than last year’s fourth quarter due to seasonal factors.
Vale’s S11D mine, in the north, achieved the highest output for a first quarter since 2020, thanks to initiatives taken during the rainy season, the company said in a report.
Iron ore sales saw a 15% increase on an annual basis, though sales lagged production due to supply-chain issues.
Iron ore prices have declined since the start of the year, briefly sinking below US$100 a tonnes in mid-March and early April due to higher port stockpiles, squeezed steel mill margins and a slow restart of construction activity in China.
The metal has rebounded with some banks upgrading outlooks for Chinese growth following better-than-expected economic data on exports and factory activity.
The Rio de Janeiro-based company reiterated its full-year iron ore production guidance of 310 million tonnes to 320 million tonnes made in December.
Citi analysts saw Vale production trending towards the upper-end of the company’s guidance.
The company, which also produces base metals, said its nickel output fell 4% from a year ago, while copper rose 22%.
Analysts expect Vale to post weaker first quarter earnings results on lower realised iron ore prices, due to the 30% price decline in the first three months of this year.
Vale’s average realised iron ore prices were US$100.70 a tonne in the three-month period, or 7.3% lower than the same period of 2023, according to its production report.
The company reports its earnings on April 24. — Bloomberg
