2023-07-19 01:45:14
© Reuters
By Marta Nogueira
RIO DE JANEIRO (Reuters) -The production of da Vale (BVMF:) rose 6.3% in the second quarter compared to a year earlier, to 78.74 million tons, while sales advanced only 0.9% in the same comparison, with the company recovering from shipment restrictions faced in the first quarter, the mining company said on Tuesday.
The result occurred in the face of a record production for a second quarter at the important S11D mine, in Pará, of 19.16 million tons, up 15.9% versus the same period of 2022, said the company in a production and sales report. .
Vale also pointed out a “solid performance” of the Itabira and Vargem Grande complexes, in Minas Gerais, in the period, which, according to the company, improved the average quality of the company’s product portfolio.
Sales of iron ore fines totaled 63.33 million tons between April and June, compared to 62.77 million tons a year earlier, initiating a recovery in productivity at Terminal Ponta da Madeira, in Maranhão, throughout the quarter, after heavy rains impacted shipments and sales between January and March.
Such restrictions explained a drop of 10.6% in the mining company’s sales in the first three months of the year compared to a year earlier, despite a 5.8% growth in production in the same comparison. At the time, the company stated that it should offset the impacts in the second half, keeping its annual sales plan unchanged so far.
This Tuesday, Vale stated that “it expects a smaller ‘gap’ between production and sales in the third quarter with the sale of inventories formed in the first half, depending on market conditions”.
The result of iron ore sales should lower expectations for Vale’s second-quarter earnings and “also raises concerns around the iron ore market,” analysts at RBC said in a note to clients.
In addition, analysts highlighted a rise in the stock, based on their own calculations. “It’s very unusual for inventory to rise on seasonally strong demand in the second quarter,” they said.
The company also reported that the realized price of iron ore fines in the second quarter was US$98.5 per tonne, down US$14.8 per tonne year-on-year, mainly due to lower reference prices, which were partially offset by due to a smaller impact of the pricing system adjustments.
Pellets production in the second quarter, according to Vale, grew 5.1% against the same period of 2022, to 9.11 million tons, due to higher production at Tubarão plants as a result of higher production of “pellet feed” .
Already sales of pellets, in the same comparison, fell 0.4%, to 8.81 million tons.
The realized price of iron ore pellets was US$160.4 per tonne, US$40.9 per tonne lower year-on-year, “due to lower 65%Fe index prices and pellet premiums,” according to the company.
BASE METALS
Vale’s copper production in the second quarter increased 41% year-on-year to 78.8 thousand tons, mainly due to a ‘ramp-up’ process at the Salobo III plant and improved performance at the Sossego operation, both no stop. Copper sales, in turn, increased 43.3% in the period, to 73.8 thousand tons, as a result of higher production volumes.
Nickel production rose 7.9% to 36.9 thousand tons, mainly due to better operational performance in Sudbury, Canada, and Indonesia. Nickel sales increased 2.5% to 40.3 thousand tons due to improved production.
(By Marta Nogueira; additional reporting by Peter FrontiniEditing by Pedro Fonseca and André Romani)
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