Vale output disappointed in fresh blow to tight iron market

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(Bloomberg) – Brazilian mining giant Vale SA produced slightly less iron ore than expected last quarter due to teething problems at a new plant, a fresh blow to The global market is already tight for steelmaking raw materials.

The world’s second-largest iron producer produced 75.7 million tons in the second quarter compared with the average estimate of 78 million tons by analysts tracked by Bloomberg. Results are still up from both the previous three months and the period affected by Covid a year ago.

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Vale’s continued recovery from the dam disaster in early 2019 makes it a major swinging factor in a market where demand remains strong despite China’s efforts to curb emissions and curb inflation. delivery of goods. Vale’s ability and willingness to expand and regain the No. 1 producer title that Rio Tinto Group lost will help determine whether the market will return to surplus. Rio Tinto said suppliers are struggling to meet demand.

While Vale was dealing with a rail disruption at one of its complexes in southern Brazil, production was halted due to disruption due to the installation of a crusher plant at the complex. S11D in the north of the country. The Rio de Janeiro-based agency also said it had delayed the resumption of other operations due to slower-than-expected licensing and additional work to enhance dam safety.

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Vale’s dam construction took a hit in early June when it was ordered to limit operations at its Timbopeba complex amid concerns around the stability of another dam. In the first quarter, the partial resumption of Timbopeba helped boost Vale’s output.

However, Timbopeba has delivered better performance thanks to the commissioning of three more wet handling lines in March. The company says its driverless training solution at the complex is working well.

In Monday’s production report, Vale maintained its full-year lead of 315 million to 335 million tons and said it reached an annual production capacity of 330 million tons. The company expects to reach a capacity of 350 million tons by year-end and 400 million tons by the end of 2022.

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However, quarterly iron ore sales fell to 67.2 million tons. Last week, Rio Tinto said its shipments were down 2% from the previous quarter and flagged annual exports could hit a low in the forecast, in part due to more rainy weather than usual. BHP Group reported a 12% increase in quarterly shipments.

Vale is also one of the world’s largest nickel producers and a major supplier of copper. Outputs for both metals fell in the second quarter, and Vale said it was reviewing its annual guidance amid a strike at one of its complexes in Canada.

The Brazilian miner will announce earnings on July 28.

© 2021 Bloomberg LP

Bloomberg.com

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https://financialpost.com/pmn/business-pmn/vale-output-disappoints-in-fresh-blow-to-tight-iron-market | Vale output disappointed in fresh blow to tight iron market

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