Vale’s new forecast output of 300 million to 305 million tonnes of iron ore this year, disclosed as part of its investor day presentation, falls short of a previous 2020 target of at least 310 million.
Some analysts said they were also disappointed with forecast production for 2021 in the range of 315 million to 335 million tonnes, which Vale’s head of ferrous metals, Marcello Spinelli, said took into account expected rainy conditions, maintenance and other operational risks.
“We think the 2021 guidance of 315-335 mt is particularly frustrating, especially considering management has recently stated the starting point for 2021 is 318 mt,” analysts at Bradesco BBI investment bank said in a research note.
Vale shares, which have surged 57% this year, were down 2.1% in afternoon trading on the Sao Paulo stock exchange.
“We can have some upside here but we also prefer to be more conservative,” Spinelli said during a presentation that also emphasized efforts to phase out risky tailings dams after the deadly disaster at Brumadinho, which killed more than 270 people.
