Vale expects to produce 310-320 million tons of iron ore in 2024

In 2023, the company forecasts production at the level of 315 million tons

Brazilian mining company Vale expects to produce 310-320 million tons of iron ore in 2024, maintaining its production target for the second year in a row. This is reported by S&P Global.

At an investor event, the company said that this year’s production should reach about 315 million tons, which is in line with its recent forecasts (+2.3% compared to 2022).

Capital expenditures next year will amount to $6.5 billion, which is almost $500 million more than in 2023. By 2026, the miner intends to increase iron ore production to 340-360 million tons due to the gradual progress of strategic projects.

The company notes that the increased demand for high-grade or value-added ore, which helps steelmakers decarbonize production by reducing the amount of carbon charge required for blast furnaces, has changed the market. Vale is optimistic about the outlook for the iron ore market as it expects continued strong demand for this raw material from steelmakers in China.

Vale CEO Eduardo Bartolomeo said that the miner is entering 2024 with full confidence in operational stability. His comments indicate that the company is finally recovering from a period of declining production and uncertainty.

At the same time, according to Bloomberg, Bartolomeo believes that China cannot dictate iron ore prices, although it is the world’s largest buyer. In his opinion, they will continue to be set by the balance between supply and demand. The Vale CEO also predicts an increasingly tough market in the future.

According to the publication, China’s new centralized iron ore buyer, China Mineral Resources Group, established last year, has in recent weeks criticized ore prices as too high and called for an improved pricing system. In addition, China’s top economic planning body has stepped up its campaign to curb market growth this year.

As GMK Center reported earlier, in the fall, Vale expected global iron ore sales and prices to be slightly higher in the fourth quarter of this year than in the previous quarter. In the third quarter of 2023, the Brazilian company sold 69.71 million tons of iron ore compared to 65.38 million tons in the same period of 2022.