Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Vale expects iron ore production to reach 350mn mt by the end of 2021 and reported a marginal drop of 0.5pc in iron ore production in 2020 at 300.4mn mt from 2019. Pellet production witnessed a drop of 29pc at 29.67mn mt. Nickel production in the year rose 3.2pc to 214,700mt from 2019 levels. Copper production is down 5.5pc to 360,100mt in 2020 from prior year. 


Iron Ore

Iron ore fines production was up 7.9pc to 84.5mn mt in Q4 (December quarter) from the previous year but down 4.7pc from the prior quarter. Iron ore production in Q4 was lower than expected on the back of higher rainfall and restrictions on tailings disposals in Southeaster System Brazil. 


In 2020, iron ore production was flat from 2019 due to resumption of halted operations including Vargem Grande and Timbopeba, however, restriction in tailings disposal in Brucutu and Itabira coupled with delays in opening new mining units in Serra Norte. COVID-19 played a negative role. Company’s Fazendao site was shit for 4-months. Vale expects iron ore production to reach 350mn mt by the end of 2021. 



Pellets production in 2020 slipped 29pc to 29.6mn mt from 2019. Production was reported at lower levels in Q4, by 24.4pc at 7.1mn mt from the prior year quarter and 16.9pc from the previous quarter. Lower feed availability and production adjustments due to the market condition resulted in a drop in output. 


Vale restarted its Vargem Grande pellet plant operations in January 2021 which were shut in February 2019, this will push pellet annual production capacity to 53.8mn mt from 46.8mn mt. Vale believes that lower pellet feed availability is the main hindrance. Pellet sales volumes totalled to 286.1mn mt in 2020. 



Production of finished nickel in 2020 jumped 3.2pc to 214,700mt. Output in Q4 was reported at 55,900mt, up 18.7pc from prior quarter and 1.4pc lower from the previous year. Nickel from Vale New Caledonia (VNC) was reported at 50,800mt in Q4, up 31.6pc from Q3 and down 2.1pc from the prior year. In 2020, production at VNC was 183,700mt, down 0.5pc from 2019. COVID-19 impacted production which led to slashed outputs across all their base metals by 7,300mt. 



Copper production in 2020 was reported at 360,100mt, down 5.5pc from 2019. In Q4, copper production was at 93,500mt, up 3.5pc from the previous year and 6.7pc higher than the previous quarter. Copper production was hurt due to COVID-19 restrictions which led to reduced workforce on-site, supply chain disruptions and travel restriction. These decreases were partially offset by 22,200mt higher production from strong performance in Sossego, on the back of increased mill processing rates and higher copper grades. In 4Q, production increased mostly due to stronger production rates across Brazil and Canada operations.



Sales of nickel in 2020 surpassed that of 2019 by 2.5pc at 210,900mt. All other commodities’ sales dropped in 2020 from the previous year. In Q4, sales was stronger than Q3. Iron ore sales in 2020 settled at 254mn mt, down 5.4pc from the previous year. In Q4, 82mn mt was sold, up 25pc from the prior quarter and 6.3pc higher than prior year. 


Pellets sales in 2020 were reported at 43.19mn mt, down 27.7pc from the prior year. In Q4, pellets’ production stood at 8.48mn mt, up 0.3pc from the previous quarter and down 22pc from the prior year quarter. 


Nickel sales stood at 210,900mt, up 2.5pc from the prior year. In Q4, sales of nickel was reported at 66,100mt, up 13pc from the prior quarter and 40.6pc from the prior-year quarter. Copper sales in 2020 was 346,200mt, down 5.2pc from the previous year. In Q4, 93,000mt of copper was sold, up 5.9pc from the previous year and up 15.4pc from the previous quarter.

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