Hot commodity: A steel worker takes a sample of raw iron from a blast furnace in Duisburg, Germany. Iron ore prices are down by nearly a quarter this year, largely on concerns over fading demand in China. — Reuters
NEW YORK: Vale SA’s iron ore production in the second quarter was stronger than expected.
The world’s second-biggest iron ore supplier mined 80.6 million tonnes of the steelmaking ingredient in the three-month period, Vale said in a statement.
That compares with the 78.9 million tonnes average estimate of analysts tracked by Bloomberg.
The output figure offers some insight into the company’s quarterly earnings, which will be reported later this month.
Vale said the quarter’s performance reinforces its confidence in achieving the upper end of its 2024 production guidance.
Traders also watched the number for its impact on market supply-demand dynamics.
Iron ore prices are down by nearly a quarter this year, largely on concerns over fading demand in China’s property sector in the wake of abundant mine supply.
Investors are awaiting new measures to be announced at this week’s Third Plenum, a meeting of China’s Communist Party leadership to set broad policy priorities.
Production topped volumes seen in the year-earlier period and surpassed first quarter levels due to seasonal factors. Iron ore sales rose 7.3% on an annual basis.
Vale’s average realised price of iron ore stood at US$98.2 per tonne last quarter, down from the first quarter.
Full-year production guidance was unchanged at between 310 million tonnes and 320 million tonnes.
While Vale’s revenues come mainly from iron ore, the Rio de Janeiro-based company is also a significant base metals producer.
Vale’s nickel output dropped about 24% from a year ago, while copper was little changed.
The company unveiled plans in June to spend as much as US$3.3bil on improvements at its mining operations in Brazil and Canada to boost copper and nickel production capacity over the next four years.
Vale reports second quarter earnings on July 25. — Bloomberg
