Reading this report (below) carefully, beyond the deceptive title- we can see IO exports heading south for Vale.

Down 2 million tonnes to China yoy from a low base in Q12019,and down more heavily to Japan (-25%), Germany (-24%) and the Middle East (-33%), yet landed costs to China were up 44%. Only the relatively high prices per mt helped out.

Iron ore sales to China fell from 58 million mt shipped in Q4, and at 34 million mt were slightly lower than Vale’s 36 million mt sales to China in Q1 2019.

In addition, the COVID 19 pandemic is playing havoc with Vale's plan to extract an additional 10 million metric tonnes per year from the Carajas mine group, the largest in the world, in the Amazonian jungle in Para state,Northern Brazil, to create a 240 million tonnes per year supply line from Northern Brazil.

In Northern Brazil, a project to expand the iron ore shipment chain by 10 million mt of additional capacity to 240 million mt/year has been impacted by the COVID-19 pandemic, while Vale said the estimated start-up in the second half of 2022 remains unchanged.
Vale dreamed of producing 400 million mts of iron ore in 2019, but ended up with 302million, down from 384.6 million mts in CY18. Where to now? The current target is 310-340 million, mts. Will it drop another 100mt in 2020?

Miner Vale sees more iron ore to China and Brazil, sees costs rise

inDry Bulk Market,Freight News04/05/2020

Miner Vale continues to expand iron ore product sales to China relative to Europe and Japan, while domestic demand in Brazil grew, according to a first quarter update.

During a period of lower iron ore production from a combination of weather and operating impacts as the miner recovers from a dam disaster just over a year earlier, Vale sold 34 million mt of iron ore and pellets into China during Q1. Brazil took 6.6 million mt of iron ore products last quarter, up from 6.3 million mt in Q1 2019.

Vale sold 37.7 million mt of iron ore fines in Q1 on CFR terms, accounting for 73% of total iron ore fines sales, which was in line with Q1 2019, it said.

Iron ore sales to China fell from 58 million mt shipped in Q4, and at 34 million mt were slightly lower than Vale’s 36 million mt sales to China in Q1 2019.

Iron ore shipments in Q1 to Japan fell 25% to 4.36 million mt, and dropped 24% to 2.5 million into Germany, from the year earlier period, Vale’s data showed.

The Middle East saw iron ore sales plunge to 707.000 mt in Q1, from 2.25 million mt in the year earlier period, Vale said.

Vale’s ferrous minerals sales saw a drop in current pricing terms to 71% of volumes, from a 78% share in Q1 2019.

Provisional pricing took on a 19% share, and lagged pricing accounted for 10%.

Vale’s iron ore costs rose due to higher sustaining investment, royalties and operating expenses, as well as moisture adjustments.

Vale’s iron ore fines and pellet EBITDA breakeven for sales landed in China at $49.30/dry mt, up from $34.40/dmt in Q1 2019, the company said.

Vale said iron ore fines saw adjusted EBITDA of $47/mt in Q1, compared with $48/mt in Q1 2019.

Pellets saw adjusted EBITDA fall at a time of lower market premiums, down to $58/mt in Q1, from $73/mt in Q1 2019, Vale said.

Vale said expenses related to the rescue of the Polaris Shipping-owned and operated Stellar Banner vessel, which ran aground in February close to Ponta da Madeira terminal laden with 295,000 mt of iron ore, will be recognized in Q2. Vale booked $1 million in related charges for Q1.

Discussions with insurance companies are “in course to recover amounts related to expenses and cargo revenue,” the Rio de Janeiro-based company added.

In Northern Brazil, a project to expand the iron ore shipment chain by 10 million mt of additional capacity to 240 million mt/year has been impacted by the COVID-19 pandemic, while Vale said the estimated start-up in the second half of 2022 remains unchanged.

https://www.hellenicshippingnews.com/miner-vale-sees-more-iron-ore-to-china-and-brazil-sees-costs-rise/


Loading iron ore from Carajas mines at Ponta da Madeira, Brazil




Stellar Banner, grounded to avoid sinking, off Ponta da Madeira, with 295,000 mt of Vale's IO onboardPlatts