Wednesday, April 28, 2021

Mining Major Vale Reports Record Q1 As Iron Ore, Copper Prices Soar in Tight Market

 Via Hellenic Shipping News, April 29:

Brazilian miner Vale, one of the world’s largest iron ore producers and a major copper producer, reported record first quarter financial results late April 26 as prices for these commodities soared, partly due to supply-side issues.

The company said it continues to stabilize output following dam disasters that resulted in lower iron ore production in recent years and the continuing impact of COVID-19 on its operations, now seen reducing copper output.

In Q1, Vale reported a pro forma adjusted EBITDA of $8.47 billion, a record for a first quarter, compared with EBITDA of $3.04 billion in Q1 2020, with seasonally lower volumes partially offset by higher prices. Q1 iron ore reference prices rose to $166.90/mt from $89/mt a year earlier. The performance was mainly pushed by the ferrous metals and base metals divisions.

Second quarter EBITDA is likely to rise on continuing increases in both iron ore and copper during April, particularly as Vale has now paid off a major part of expenses related to its fatal 2019 Brumadinho tailings dam accident, executives said on an April 27 call with analysts.

S&P Global Platts assessed the 62% Fe Iron Ore Index at $193.85/dry mt CFR North China on April 27, up $2.40/dmt day on day to its highest ever, reflecting surging demand for steel amid a COVID-19 recovery stimulus, which has led to a flurry of new construction projects. The previous record was registered on Feb. 15, 2011, at $193/dmt.

The LME cash copper price stood at $9,849/mt April 27, close to a 10-year high amid concerns of production shortfalls in Latin America as demand grows from the electrification sectors.

Vale’s net income rose to $5.55 billion, an increase of $4.81 billion from fourth-quarter 2020, when the company registered payment of a chunk of Brumadinho-related expenses and asset impairment charges on its nickel and coal businesses....