Vale posts largest second-quarter iron-ore output since 2018
SAO PAULO/RIO DE JANEIRO - Brazilian miner Vale posted on Tuesday its largest second-quarter output figure since 2018, with production of the steelmaking material rising 0.8% from a year earlier and coming above analysts' estimates.
Vale, one of the world's largest iron-ore producers, reported iron-ore output of 84.3-million tons for the April to June quarter, above a Visible Alpha consensus of 82.2-million tons.
The miner said iron-ore production in the period was supported by a record second-quarter performance in its S11D complex and additional volumes from Capanema and VGR1 projects, all of them located in Brazil.
Vale maintained its projection of producing between 335-million and 345-million tons of iron ore this year, while also keeping its other yearly output estimates unchanged.
Iron-ore sales, which include fines, pellets and run-of-mine, stood at 79.7-million tons in the quarter, a 3.1% rise reflecting the sale of stocks and higher output, Vale said. Analysts expected 78.2-million tons, according to estimates compiled by Visible Alpha.
Vale said its Oman pellet plants, which it had halted earlier this year due to the conflict in the Middle East and associated logistics constraints, partially resumed production in late June.
The average realized price for iron-ore fines rose 11.6% year-on-year to $95 a ton, but fell 0.8% from the first quarter on "negative impact of pricing mechanisms", according to Vale's output and sales report.
Jefferies' analysts wrote Vale's report was "good enough," citing better-than-expected iron-ore production. The main uncertainty, they added, is regarding unit costs.
Citi expects market estimates for Vale's second-quarter earnings before interest, taxes, depreciation and amortisation to move up between 1% and 2% after the report, analyst Alexander Hacking wrote. "These results represent a continued strong start to the year – especially for copper and nickel," he added.
On copper, Vale's production rose 6.3% to some 98 400 tons, with output at the Salobo project in Brazil reaching a record for a second quarter, while the Sossego plant in Brazil, and Voisey's Bay in Canada, also showed improved performance.
Nickel output reached around 42 000 tons, up 4.2%, as higher production at the Brazilian Onca Puma project and a record at Canada's Long Harbour refinery outweighed the impact of a biennial planned maintenance at Canada's Sudbury downstream facilities.
Vale is set to release second-quarter earnings on July 30 and will vote to appoint a new chairperson this week.
