Vale has maintained its iron ore fines production guidance of 310 million-330 million mt in 2020 despite the suspension of activity at its Itabira mining operations in Brazil in early June due to the coronavirus outbreak. Vale was told by state inspectors in Minas Gerais that it can reopen the Itabira complex, the company said on June 17. But the ramp-up is expected to be gradual.
cFlow, Platts trade-flow software, showed that Vale shipped an average of 18 million mt/month over January-May.
Last year, Vale sold around 25 million mt of its output to Brazilian steelmakers. Over January-April this year, Brazilian steel production fell by 14% year on year due to the effects of the pandemic, suggesting that iron ore demand may be lower this year.
If Vale's 2020 domestic sales were at a similar level to last year, it would still need to export around 27 million mt/month of iron ore over the balance of this year to be in line with its tonnage guidance. This means its monthly exports would have to be lifted by an additional 9 million mt/month, Platts estimates.
This would only get to the lower end of the guidance range, so reaching the higher end would require an even bigger monthly increase.
