Vale revises down 2019 iron ore shipment projections
Brazilian iron ore producer Vale has revised lower its shipment forecasts for this year, indicating tighter supplies for the rest of 2019 that may support seaborne prices.
Vale expects to ship 307mn-312mn t of iron ore, including pellet, for 2019, down from a previous forecast of 307mn-332mn t.
The news lifted the most active Dalian commodity exchange iron ore futures contract by 2pc in early trade today.
Vale expects sales of iron ore and pellet for October-December 2019 to be in a 83mn-88mn t range against 96.5mn t for the same period of 2018. Production and sales are expected to be at 70mn-75mn t during January-March 2020 compared with 67.7mn t in the first quarter of 2019.
Vale attributed the sequential fall in first-quarter 2020 shipments to seasonality, a gradual and safe return to operations of closed capacity and the company's focus on profit margins over sales volumes.
"Vale's pellet supplies to China are falling, which is supportive of Indian pellet prices," said the senior executive of an Indian pellet producer.
An accident at Vale's Feijao iron ore mine in Minas Gerais province on 25 January this year led to more than 200 deaths and the closure of some of its mines, tipping global iron ore supplies into a deficit.
The Argus ICX 62pc seaborne fines index has been supported above $80/dry metric tonne for most of the year since the accident. But it has traded below this price on 8 November and yesterday as ample seaborne supplies and concerns about winter sintering restrictions in China weighed on sentiment.
By Prasenjit Bhattacharya
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