What’s interesting is that Vake reaffirmed yesterday that margin...

What’s interesting is that Vake reaffirmed yesterday that margin over volume is one if its core strategies:

“The miner also said first-quarter output and sales will be 70 million to 75 million tonnes “due to seasonality, the gradual and safe return of operations and in line with margin over volume strategy”

The volume it’s intending to produce in the 1st quarter is actually less when comparing on a like to like basis. Brutchu produces about 2.5mt per month and that was out of action for 2 months in 1st qtr this year (total 5mt). Add another 2mt for Vargem Grande as that was also out of action for 2 months.

Therefore despite ramp ups in S11D, it is being very careful in getting too much on the market. I suppose we know what happened when Veronica hit the Pilbara in March and that was an outage of 1 week. IO went through the roof.

Vake had initially mentioned the margin over volume strategy a week ago when Alegria mine would restart(see below):


Vale to restart Alegria mine, keeps 2019 sales guidance unchanged
Brazilian mining company Vale will resume operations at its Alegria mine through dry stacking to produce 1 million tonnes of iron ore in 2019, the company said, as it maintained its full-year sales volumes guidance of 307-332 million tonnes.

The restart was authorized by Brazil’s national mining agency, ANM, which reverted a March decision that had halted the unit, the company said on Friday November 1. Output will be limited to 1 million tonnes of iron ore until year-end for safety reasons, it added. “For the following years, production will gradually return, observing additionally the margin over volume strategy [of the company],” it said. “[Vale] expects sales to be between the lower [end] and midpoint of the range [in 2019].” The decision from ANM allows Vale to resume 8 million tonnes..