RE Vale 4Q20 Production Report:

Vale 4Q20 iron ore output lower than estimated

Bruno Venditti| February 3, 2021 | 4:00 pm

Valereported4Q20 output of 84.5 million tonnes, lowerthan estimated by analysts, mainly due to higher rainfall levels and tailings disposal restrictions in the Southeastern System in Brazil.

The number is a 5% decline from the third quarter (88.6 Mt) but well ahead of the same period a year earlier (78.3Mt).

Vale’s iron ore fines production totaled 300.4 Mt in 2020, in line with 2019 as a result of the resumption of halted operations such asVargem Grande and Timbopeba, but offset by constraints in tailings disposal in Itabira and Brucutu; and delays in opening new mining fronts in Serra Norte and due to covid-19 restrictions.

In 4Q20, Vale restarted the Serra Leste operation, after receiving the required Installation License. The site is expected to produce 4-5 Mt in 2021, reaching 6 Mtpy of run-rate until the end of the year.

Vale ended 2020 with 322 Mt of production capacity and expects to achieve 350 Mt capacity by the end of 2021.

“Vale remains confident to achieve 400 Mtpy capacity by the end of 2022,” the company said in apress release.

Vale’s pellet production totalled 29.7 Mt in 2020, 29.0% lower than in 2019.

Sales volumes of iron ore fines and pellets totaled 286.1 Mt in 2020, 5% below iron ore fines production.

Iron ore prices bouncedon Wednesday after analysts at Credit Suisse and Morgan Stanley offered bullish forecasts for the steelmaking raw material.

According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China (CFR Qingdao) were changing hands for $152.65 a tonne, up nearly 2% from Tuesday’s trade.