Chinese policies impacting production outlooks of major iron ore producers
Brazil's Vale, the world's largest iron ore producer and exporter, reported record third quarter output for the commodity, mostly because of an improved operational performance at the firm's northern system, as well as the ramp-up of flagship mine S11D (pictured).
However, Vale warned the market its total output for 2017 is expected to be at the lower end of the 360-380Mt guidance, in line with the company's ongoing strategy to maximize margins.
The miner cited reductions in production of iron ore with high silica content from its southern and southeastern systems as the main reason. But Vale reaffirmed its long-term base case target of 400Mt/y.
Vale's Q3 production report followed iron ore output figures released in October by Anglo-Australian rivals BHP Billiton and Rio Tinto, which came in below expectations in BHP's case and higher than expectations for the latter.
Concerns regarding low-cost supply from Australia and Brazil and more modest demand from China, the world's largest steel producer and iron ore consumer, are making for mixed outlooks for the three biggest producers.
In a November 28 presentation, BHP said Chinese policy is impacting short-term iron ore demand and pricing, as structural reform in the Asian country underpins longer-term demand for high-quality iron ore and metallurgical coal.
London-based Capital Economics' chief commodities economist Caroline Bain told BNamericas earlier this month that a key factor supporting steel prices has been the prospect of Chinese output cuts, which would curb iron ore demand.
According to Bain, the proposed cuts to steel capacity during the winter months will probably lead to lower output. So far this year, the highest price the commodity has reached is US$94.90/t, in February.
Below are iron ore output figures from the world's top three producers for the quarter ended September 30.
VALE
Vale's Q3 iron ore output from its own operations rose 3.3% year-on-year to 95.1Mt, a record for a third quarter.
Production from the northern system, which comprises the Carajás, Serra Leste and S11D mines, was up 16.4% to a record 45.0Mt, the company said in the report.
Vale's southeastern system, which comprises the Itabira, Minas Centrais and Mariana mining hubs, saw production fall 1.3% to 26.9Mt, while that of the southern system was down 12.0% at 22.6Mt.
The company's pellet output stood at 12.8Mt, up 5.8% from 3Q16.
Vale said projects to restart the São Luis and Tubarão II pellet plants are on schedule, with operations envisioned for the first half of 2018.
BHP BILLITON
BHP's total iron ore production for the September quarter dropped 3% year-on-year to 55.6Mt, it said in a report.
However, the company said: "Mine productivity improved in the quarter as a result of increased plant availability and consistent feed rates. Stockpile levels have been rebuilt and are expected to be partially drawn down in the next [this] quarter."
Port debottlenecking activities "will extend into the December 2017 quarter. BHP continues to work with the relevant authorities in relation to the necessary approvals to increase system capacity to 290Mt/y (100% basis)."
Mining and processing operations at its Brazilian pellet JV Samarco remain suspended following the tailings dam collapse in November 2015.
BHP expects iron ore guidance for fiscal year 2018 ending June of 239-243Mt on an equity basis.
RIO TINTO
Rio Tinto reported a 2% year-on-year increase in iron ore production to 72.9Mt on an equity basis.
When compared to 2Q17, production rose 8%, the London-based commodities giant said in a production report.
"The business performed very well in the September quarter, with a strong quarterly production performance and a wave of productivity improvements embedded through our operations. In particular, we are making good progress with further improvements to our world-class Pilbara iron ore business [in Australia], including the opening of the Silvergrass mine," said CEO Jean-Sébastien Jacques.
Subscribe to the leading business intelligence platform in Latin America with different tools for Providers, Contractors, Operators, Government, Legal, Financial and Insurance industries.
News in: Mining & Metals (Brazil)
Brazil boasts of energy transition riches at PDAC
With growing demand for minerals related to the energy transition, Brazil sees the opportunity to attract investments.
Brazil nickel projects affected by price volatility
As prices fell drastically, miners with operations in Brazil are rejigging their projects.
Subscribe to Latin America’s most trusted business intelligence platform.
Other projects in: Mining & Metals (Brazil)
Get critical information about thousands of Mining & Metals projects in Latin America: what stages they're in, capex, related companies, contacts and more.
- Project: Santa Quitéria
- Current stage:
- Updated:
2 months ago
- Project: Tucumã project (ex Boa Esperança)
- Current stage:
- Updated:
2 months ago
- Project: Salobo III
- Current stage:
- Updated:
2 months ago
- Project: Block 8 (Brazil)
- Current stage:
- Updated:
2 months ago
- Project: Cabaçal
- Current stage:
- Updated:
2 months ago
- Project: Rio Piracicaba
- Current stage:
- Updated:
2 months ago
- Project: Serrita
- Current stage:
- Updated:
3 months ago
- Project: Paracatu
- Current stage:
- Updated:
3 months ago
- Project: Tailings Filtering Plant (Minas - Rio System)
- Current stage:
- Updated:
3 months ago
- Project: Manga
- Current stage:
- Updated:
3 months ago
Other companies in: Mining & Metals (Brazil)
Get critical information about thousands of Mining & Metals companies in Latin America: their projects, contacts, shareholders, related news and more.
- Company: Ison Do Brasil Mineracao Ltda
- Company: Brass Do Brasil Projetos E Consultoria Tecnica Ltda.  (Brass Do Brasil)
-
The description included in this profile was taken directly from an official source and has not been modified or edited by the BNamericas’ researchers. However, it may have been...
- Company: Lafaete Locação de Equipamentos  (Lafaete Locação)
-
The description contained in this profile is taken directly from an official source and has not been edited or modified by BNamericas researchers, but may have been machine tran...
- Company: Sotreq S.A.  (Grupo Sotreq)
-
The description contained in this profile was taken directly from an official source and has not been edited or modified by BNamericas researchers, but may have been automatical...
- Company: P.A. Gold Mineração e Metalurgia S.A.  (P.A. Gold)
-
The description contained in this profile was taken directly from an official source and has not been edited or modified by BNamericas researchers, but may have been automatical...
- Company: SEI Engenharia Ltda.  (SEI Engenharia)
-
SEI appeared on the Brazilian market in 2000, as an option for quality and efficiency, initially in the areas of Mining, Metallurgy, Steel and Industry. Subsequently, it began i...
- Company: Fomento do Brasil Mineração Ltda.  (Fomento do Brasil)
-
The description contained in this profile was taken directly from an official source and has not been edited or modified by BNamericas researchers, but may have been automatical...