Vale Reports 4% Decrease in Iron Ore Output for Q3 2023

Oct, 18, 2023 Posted by Gabriel Malheiros

Week 202340

One of the mining industry giants, Vale, witnessed a 4% reduction in iron ore production during the third quarter of 2023 compared to the same period in 2022, with the volume produced totaling 86.24 million tons. This decline was partly attributed to reduced run-of-mine (ROM) iron ore production at the Paraopeba complex and lower output in the Serra Norte region.

An August conveyor belt system failure at the S11D project also impacted production results, resulting in a 1.5 million-ton reduction in the Northern System. However, it’s worth noting that production increased by 9.5% compared to the previous quarter.

Vale’s iron ore sales for the third quarter of 2023 reached 69.7 million tons, marking a 6.6% increase compared to the same period the previous year and a 10% growth over the last quarter. This positive sales performance was partly due to the increased marketing of fine iron ore and iron ore pellets, which saw a rise of 4.4 million tons compared to the previous year, taking advantage of favorable market conditions.

Production from Vale’s Southern System decreased by 2.6 million tons, mainly due to reduced run-of-mine output and sales from the Paraopeba Complex, along with a temporary halt in Viga’s operations for specific pipeline maintenance.

On the other hand, pellet production increased by 11% year-on-year, reaching 9.17 million tons, driven by increased pellet feed supply from Brucutu and Itabira.

In August, Vale initiated commissioning tests for the first of two iron ore briquette plants in Tubarão, with a combined capacity reaching 6 million tons per year after ramp-up.

Pellet sales amounted to 8.6 million tons in the third quarter, reflecting a 1.1% increase year-on-year, although they declined by 2.2% compared to the previous quarter.

The realized price for fine iron ore was $105.1 per ton, a 13.5% increase compared to the same period the previous year. This rise was largely attributed to higher iron ore benchmark prices and positive price adjustments.

The realized price for pellets in the quarter was $161.2 per ton, showing a 17% decrease compared to the same period the previous year, though there was a slight 0.5% increase compared to the previous quarter.

The all-in premium, representing the difference between realized and benchmark prices, amounted to $3.8 per ton, with a $2.8 decrease year-on-year, primarily due to lower pellet premiums. Quarter-on-quarter, the all-in premium was slightly lower, driven by lower market premiums, as steel mills have favored lower-quality fines due to reduced steel margins. This was partially offset by a higher product portfolio sales mix, with a greater share of Northern System volumes.

Source: Monitor do Mercado

To read the original news report, click on: https://monitordomercado.com.br/noticias/47530-producao-de-minerio-de-ferro-da-vale-cai-4-no.

Sharing is caring!

Leave a Reply

Your email address will not be published. Required fields are marked *