Vale churned out less iron ore than expected last quarter after lower productivity at one mine and a ship loader fire, with its recovery from an early-2019 tailings dam disaster proving a little slower than thought.
The ramp-up means Vale has an outsized impact on prices in a tight market, especially after Chinese steel output jumped in March. Since surging last year amid robust demand from Chinese steel mills and pandemic-related supply disruptions, iron-ore futures moved around in a trading range of about $145/t to $175/t, before breaking out to multiyear highs in recent days.
First-quarter output came in at 68-million metric tons, the Rio de Janeiro-based company reported Monday, compared with the 72-million-ton average analyst estimate. While Vale’s output slipped from fourth-quarter levels on seasonal factors, it was higher than a year ago. This year, Vale is expected to account for 83% of global supply growth, according to BloombergNEF.
The company maintained its full-year guidance of 315-million to 335-million tons, and achieved annual output capacity of 327-million tons in the quarter. Still, iron ore sales lagged output, coming in at 59.3-million tons, to continue a trend from last year as the company restocked supply chains.
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