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Vale (NYSE:VALE) said late Tuesday it produced 83.6M metric tons of iron ore in Q2, up 3.7% Y/Y and above expectations, driven mainly by a new Q2 production record at the S11D mining project in Brazil, its top iron ore producer, and a strong performance at its Brucutu mine.
Vale (NYSE:VALE) maintained its full-year iron ore production guidance of 325M-335M metric tons.
Q2 iron ore sales fell 3.1% Y/Y to 77.3M tons, with the company’s average realized price of iron ore fines landing at $85.10/ton, down 13.3%.
Iron ore sales lagged production, Vale (NYSE:VALE) said, as it has been shifting from a value-over-volume approach by offering a wider range of grades to suit market demand, according to Bloomberg; steel mill margins have been stressed, so they are not always paying a premium to buy higher-quality ore Vale produces.
Iron ore still accounts for ~80% of Vale’s (VALE) revenues, but the company also is a base metals producer, and Q2 nickel production jumped 44% Y/Y to 40,300 tons and copper output climed 18% to 92,600 tons.
Vale (VALE) posted a “solid quarter” and is “on track to meet guidance,” Citi analyst Alexander Hacking wrote.