Vale Q1 Iron Ore Production Declines Y/Y While Copper & Nickel Rise

Core Insights - Vale S.A. reported a decline in iron ore production for Q1 2025, with total output at approximately 67.7 million tons, a 4.5% decrease year-over-year, despite strong performance at the S11D mine [1][2][3] Iron Ore Production - The S11D mine achieved its highest-ever first-quarter output of 19.4 million tons, marking a 9.3% increase from Q1 2024, driven by asset reliability initiatives [2] - The Northern System's total output fell by 2.6% year-over-year to around 35 million tons due to licensing restrictions and heavy rainfall [3] - Southeastern System's production decreased by 6% to 18.4 million tons, impacted by a 49-day maintenance period at the Cauê plant, although improvements at Fazendão partially offset this decline [4] - Southern System's output dropped by 7% to 14.3 million tons as Vale shifted focus towards higher-margin products [5] Pellet Production - Pellet production decreased by 15.2% year-over-year to 7.2 million tons, attributed to lower feed availability and increased rainfall affecting the Northern System [6] Sales Volumes and Prices - Iron ore fines sales rose by 8% year-over-year to 56.8 million tons, driven by the sale of previously built-up inventories [7] - Total iron ore sales increased by 3.6% to 66.1 million tons, while pellet sales fell by 18.8% to around 7.5 million tons [8] - The average realized price for iron ore fines was $90.8 per ton, down 9.8% year-over-year, and for pellets, it was$ 140.8 per ton, an 18.1% decrease [8] Copper Production - Copper production increased by 11% year-over-year to 90.9 thousand tons, with significant contributions from the Salobo and Sossego mines [9] - Copper sales rose by 6.6% to 81.9 thousand tons, reflecting higher production levels [10] - The average realized price for copper operations was $8,891 per ton, up 15.7% year-over-year [11] Nickel Production - Nickel production grew by 11.1% year-over-year to 43.9 thousand tons, driven by the ramp-up of Voisey's Bay underground mines [12] - Nickel sales increased by 17.5% to 38.9 thousand tons [12] - The average realized nickel price was$ 16,106 per ton, down 4% from the previous year [13] Financial Outlook - Vale is expected to report Q1 2025 revenues of $8.16 billion, indicating a 3.5% year-over-year decline, with earnings estimated at 37 cents per share, a 5% drop [14][15] - The company projects iron ore production between 325-335 million tons and copper production between 340-370 thousand tons for 2025 [15] Peer Comparisons - Rio Tinto reported a 9% decline in iron ore shipments to 70.7 million tons for Q1 2025, while BHP's iron ore production remained flat at 61.8 million tons [16][18] Stock Performance - Vale's shares have decreased by 25.3% over the past year, compared to a 24.9% decline in the industry [20]