Vale’s iron ore output totaled 68 million tonnes in 1Q21, 14.2% higher than in 1Q20, but down 5.5% compared to the 72 million tonnes average analyst estimate.
According to the company, the year on year growth is attributed to the gradual resumption of halted operations in Timbopeba, Fábrica, and Vargem Grande complexes in Minas Gerais state throughout 2020, stronger performance in Serra Norte in Pará state, lower rainfall in January, and the restart of Serra Leste operations, also in the Northern System.
The ramp-up means Vale has an outsized impact on prices in a tight market, especially after Chinese steel output jumped in March.
Performance was partially offset by scheduled maintenances in S11D, and lower performance in the Itabira complex related to tailings disposal restriction in the complex.
Vale reported 19.5% quarter-over-quarter decline in production, mainly attributed to usual seasonal rains.
This year, Vale is expected to account for 83% of global supply growth, according to BloombergNEF.
Vale declared a production capacity of 327 million tonnes per year. In 2018, before the Brumadinho dam collapse, Vale produced 385 million tonnes.
The miner maintained its full-year guidance of between 315-335 million tonnes of iron ore for 2021.
The company said last year it expects to reach an iron ore capacity of 400 million tonnes per year by the end of 2022 or early 2023.
Vale’s pellet production totalled 6.3 million tonnes in 1Q21, 9.2% lower than in 1Q20, as a result of lower pellet feed availability from Vale’s sites mainly from Itabira and Brucutu.
Despite a weaker quarter, Vale expects to gradually increase production during 2021 with the higher availability of pellet feed from Timbopeba and Vargem Grande.
Sales volumes of iron ore fines and pellets totalled 65.6 million tonnes in 1Q21, up 11% y/y on stronger iron ore production, but partially offset by lower pellet-feed availability.
Vale, which is also the biggest producer of mined nickel, produced 4.7% less of the metal than a year ago, excluding the New Caledonia operations the company sold.
The company’s copper production was 19% down over the same span due to maintenance that was slowed by covid-19 related restrictions on contractors.
In coal, Vale has concluded a revamp of two processing plants in Mozambique after announcing its intention to exit the coal business.
(With files from Bloomberg)