Vale’s iron ore output rises 2.4% in Q2, nearing annual target

Vale reported closing the second quarter with an iron ore output of some 80.59 million tonnes, marking a 2.4% increase from the same period last year. This output supports the company’s projection of hitting its 2024 target of 320 million tonnes by December. These details were highlighted in the company’s quarterly production report released Tuesday (16).

Currently in the midst of a leadership transition, Vale plans to publish its full second-quarter financial results on July 25th.

The company attributed its solid quarterly performance to the robust outputs at its S11D project in Carajás, Pará, and the Vargem Grande complex in Minas Gerais. The S11D project notably set a second-quarter record by producing 19.5 million tonnes, a 1.9% increase from 2023. Meanwhile, the Vargem Grande system saw a significant surge in production, with 11.8 million tonnes generated from April to June, up 27.5% from the same quarter last year.

In the first half of 2024, Vale’s iron ore production reached 151.4 million tonnes, marking a 4.1% increase compared to the same period in the previous year. The company has set its production goal for 2024 at between 310 million and 320 million tonnes.

Iron ore sales for the second quarter were reported at 79.79 million tonnes, showing a 7.3% increase from the same quarter last year. Cumulative sales for the first six months amounted to 143.6 million tonnes, which is a 10.4% rise compared to the first half of 2023.

Vale attributed this robust sales performance to intense shipment activity and the strategic selling of inventories from previous periods. According to the production report, “The proportion of sales from high-silica products in our mix has continued to rise, aligning with our tactical value creation strategy in response to current market conditions.”

Vale reported that the average price for its primary product, iron ore fines, was $98.2 per tonne in the second quarter, showing a decrease of $2.5 per tonne from the first quarter. The company attributed this decline to the general drop in iron ore prices and reduced quality premiums, though these effects were partly mitigated by favorable pricing mechanisms. Vale employs a sophisticated and varied pricing structure for its clients.

The following chart shows the volume of iron ore exported from Brazil via maritime means from January 2021 to May 2024. The data comes from DataLiner.

Iron Ore Export Volume | Jan 2021 – May 2024 | WTMT

Source: DataLiner (click here to request a demo)

Regarding iron ore pellets, another significant item in Vale’s product lineup, the average realized price was $157.2 per tonne, reflecting a decrease of $14.7 per tonne from the previous quarter, influenced by the downtrend in iron ore prices. Pellet production for the quarter stood at 8.89 million tonnes, marking a 2.4% decrease year-on-year. For the first half of the year, pellet production amounted to 17.3 million tonnes, slightly down by 0.4% compared to the same period last year.

In the metals sector, Vale reported that copper production amounted to 78,600 tonnes in the second quarter, showing a slight decrease of 0.3% compared to the same period in 2023. Nickel production, however, saw a more significant decline, totaling 27,900 tonnes, which represents a 24.4% decrease from the second quarter of the previous year.

For the first half of the year, copper production reached 160,500 tonnes, marking a 10% increase year-on-year. Conversely, nickel production was 67,300 tonnes, reflecting a 13.6% decrease compared to the same period last year. For the full year, Vale has set its production targets for copper at between 320,000 and 355,000 tonnes and for nickel at between 160,000 and 175,000 tonnes.

Translation: Todd Harkin

Source: Valor International

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