Vale, the engine of the Brazil-to-China capesize bulker trade, saw its iron ore production increase in the second quarter and is confident it will reach the high end of its 2024 guidance.
The Brazilian miner accounts for roughly 20% of all iron ore carried by sea, making its output figures a key indicator for owners of larger bulk carriers.
Vale produced 80.6m tonnes of iron ore in the second quarter of 2024, 2.4% above last year’s output level of 1.9m tonnes and by 13.8% quarter on quarter.
It attributed the production increase to a robust performance at its S11D in Serra dos Carajas northern Brazil, the world’s largest iron ore mine, and its complex in Vargem Grande.
This also edges the company closer to its 2024 production guidance of 310m to 320m tonnes. Vale feels confident in achieving production levels on the upper end of the scale, mirroring the 321.2m mined last year. Back in 2022, the company missed its guidance by as much as 12m tonnes.
Meanwhile, the company’s iron ore sales also increased by 7.3% to 79.8m tonnes compared with last year, supported by strong shipments and the sale of inventories from previous periods.
However, the price of iron ore fines and pellets were lower quarter on quarter, largely affected by lower iron ore prices and lower quality premiums, the company outlined.
Brazil’s seaborne iron ore exports totalled 373.3m tonnes in 2023, up 9% from 2022, according to Clarksons Research, which forecasts 2024’s volumes to climb by 6%.
Total global seaborne iron ore trade reached 1.53 billion in 2023, with just over half carried on large capesize and newcastlemax bulkers, according to voyage data from bulker tracking platform Oceanbolt.
The C3 capesize route on the Baltic Exchange, covering the route from Tubarao, Brazil, to the Chinese port of Qingdao, was at $25.64 per tonne Wednesday, down from its most recent peak of $32.63 per tonne recorded earlier this month. Meanwhile, the round voyage C14 route between Brazil and China was at $22,400 per day, down from the 1 July peak of almost $35,900.
Capesize index rates fell to their lowest level in three weeks on Tuesday, with iron ore futures also retreating as investors awaited details of economic reform measures from China’s third plenum, according to Reuters.
