Vale expects higher iron ore sales for 2019 on Q2 recovery
Source: Mysteel
Jul 23, 2019 14:30
After the resumption of Brucutu mine, Vale expects “the 30 million t/y dry processing production will be gradually resumed starting by the end of this year and the remaining 30 million t/y, which includes wet processing, is estimated to return in about two to three years”, according to its quarterly report.
For April-June, Vale produced 64.1 million tonnes of iron ore fines, down 12.1% on quarter and 33.8% lower on year, with the continuing affection from the Brumadinho tailings dam rupture in late January and the abnormally heavy rains in the area where its Northern System iron ore mines are located in April and early May, it explained.
As for sales, Vale posted a 11.8% quarter-on-quarter increase in its iron ore fines sales to 61.9 million tonnes in the second quarter thanks to the contribution from the offshore inventories, though the volume was still 15.5% lower on year.
Vale has been ramping up the output from the S11D project, which contributed to the run rate of the Northern System hitting 215 million t/y in June, and the company targets to maintain the iron ore production at the S11D at around 18.5-19 million tonnes/month for the second half of 2019 to lift the system’s overall run rate to 230 million t/y.
Over April-June, Vale produced 9.1 million tonnes of iron ore pellets, down 25.5% on quarter or 29.3% on year due to the complete suspension of the Fabrica and Vargem Grande pellet plants in its Southern System as part of the aftermath of the dam collapse in Minas Gerais, Southeast Brazil, the abnormal rains in the Northern and Southeastern Systems that affected operations, and the maintenance at the Tubarao plants in Southeastern System.
Its pellet sales, thus, fell further by 28.2% on quarter or 33.2% on year to 8.8 million tonnes over April-June, and the total sales volume for the first half of 2019 reached 21.2 million tonnes, or down 19.7% on year.
The prevailing market concern on supply with Vale’s operations disruption and the uncertainties on the timetable of the resumption has contributed greatly to the seaborne iron ore price strengthening so far this year, and Mysteel’s 62% Australian iron ore fines price index for seaborne cargoes has surged from $72.25/dmt on January 2 to $127.15/dmt on July 3, or a new five-year high.
Written by Victoria Zou, zyongjia@mysteel.com
Edited by Hongmei Li, li.hongmei@mysteel.com
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