Vale S.A. VALE reported iron ore production of around 85 million tons (Mt) for the fourth quarter of 2024, which was 4.6% lower than the year-ago quarter, reflecting a shift toward higher-margin products.
However, VALE’s iron ore production for 2024 reached 328 Mt, in line with its latest provided guidance. Compared with 2023, iron production was up 2% and was the highest since 2018.
Digging Deeper Into Vale’s Iron Ore Production Numbers
The decline in iron ore production seen in the quarter mainly reflected the company’s portfolio optimization decision, which prioritizes the production of higher-margin products. The S11D mine produced record iron ore production of 23.7 Mt in the fourth quarter. The commissioning of Brucutu’s fourth processing line resulted in the site’s highest quarterly production since 2019. This was partially offset by maintenance activities at the Conceição 2 plant, which impacted Itabira’s performance.
In 2024, S11D achieved a record output of 83 Mt as a result of the optimized maintenance strategy, which enabled greater asset availability and operational stability.
Vale’s pellet production was down 7% year over year to 9.2 Mt in the fourth quarter. This was mainly due to the Vargem Grande plant performance, impacted by maintenance activities in November and December. Full-year pellet production was reported at 36.9 Mt, up 1.2% year over year.
Details on Vale’s Iron Ore Sales Volumes & Realized Prices
Sales Volume Dip in Q4: Iron ore fines sales in the fourth quarter of 2024 declined 10% from the year-ago quarter to 69.9 Mt. Pellet sales were down 2% to around 10 Mt. Total iron ore sales were down 10% year over year to 81.2 Mt. The decline in sales was attributable to portfolio optimization based on current market conditions, resulting in high-silica products being predominantly directed to the formation of blended products and concentration plants in China (PFC1).
Full-Year Sales Improvement: Total iron ore sales were up 2% year over year to 306.7 Mt in 2024. Iron ore fines sales increased 1.4% from the prior year to 260 Mt and pellet sales were up 7% to around 38.3 Mt.
Iron Ore Prices Down: The average realized iron ore fines price was $93 per ton in the December-ended quarter, down 21.4% year over year due to lower iron ore prices. The average realized iron ore fines price for 2024 was $95.3 per ton, 11.8% lower than 2023.
Vale’s Copper Operations Deliver Growth
In the fourth quarter, Vale produced 101.8 kt of copper, which was 2.7% higher than the year-ago quarter. Enhanced performance at Salobo 1&2 and the completion of the Salobo 3 ramp-up led to the improvement in the quarter. This was offset by lower output at Sossego due to decreased feed grade to the mill, as planned. In Canada, copper production improved mainly on the back of increased mill throughput in Sudbury and the ramp-up of VBME.
Vale sold 99 kt of copper in the fourth quarter, which was up 1.5% year over year, reflecting the higher production.
Copper production for 2024 was up 6.6% year over year to 348.2 kt. It came in higher than the company’s copper production guidance of 345 kt for the year. Copper sales recorded for the year were 327.2 kt, up 6% from last year.
The average realized price for copper operations only (Salobo and Sossego) was $9,187 per ton, up 15.7% year over year. The average realized copper price for all operations (including copper sales originating from nickel operations) was $8,947 per ton.
In 2024, the average realized price for copper operations was $8,811 per ton, a 10.7% increase from $7,960 per ton in 2023.
Vale’s Nickel Production & Sales Overview
Vale’s production of nickel increased 1.3% year over year to 45.5 kt in the October-December 2024 period. This reflects improved performance in Sudbury and the continued ramp-up of Voisey’s Bay underground mines. Nickel sales were recorded at 47.1 kt, down 1.7% from the year-ago quarter’s figure. The average realized nickel price was $16,163 per ton, down 12% from the year-ago quarter. This was in line with the decrease in LME nickel reference prices.
In 2024, the total production of nickel was recorded at 159.9 kt, which was down 3% year over year. VALE had expected nickel production in 2024 to be 160 kt. Nickel sales were down 7.6% year over year to 155.2 kt.
For 2024, the average realized nickel price plunged 21.8% year over year to $17,078 per ton.
Expected Impact on VALE’s Upcoming Q4 Results
Vale is scheduled to report fourth-quarter 2024 results on Feb. 19, 2025. Lower iron ore and nickel sales volume, coupled with lower prices, are likely to have impacted VALE’s top-line performance. This is likely to have been somewhat offset by higher copper sales volumes and prices.
The Zacks Consensus Estimate for Vale‘s fourth-quarter revenues is $10.03 billion, indicating a 23% year-over-year decline.
VALE’s Guidance for 2025
The company expects iron ore production to be in the band of 325-335 Mt. Pellet production is projected to be between 38 Mt and 42 Mt.
Vale expects to produce copper in the range of 340-370 kt . Nickel output will likely come between 160 kt and 175 kt.
Vale's Peer Performances
BHP Group’s BHP iron ore production rose 1% year over year to 66.2 Mt in the second quarter of fiscal 2025 (ended Dec. 31, 2024). Higher production at Western Australia Iron Ore (WAIO) as a result of strong supply-chain performance was partially offset by significant wet weather. This takes BHP's total iron ore production in the first half of fiscal 2025 to 130.9 Mt, 1% higher than the year-ago period.
BHP’s iron ore production guidance for fiscal 2025 is in the band of 255-265.5 Mt. WAIO's production is likely to be in the upper half of BHP’s expectation of 250-260 Mt (282-294 Mt on a 100% basis).
BHP’s copper output improved 17% year over year to 510.7 kt in the fiscal second quarter . For the first half of fiscal 2025, BHP’s copper production was 987 kt, up 10% year over year.
The company expects copper production to be within the range of 1,845-2,045 kt in fiscal 2025.
Rio Tinto RIO reported a 1% year-over-year decline in its fourth-quarter (ended Dec. 31, 2024) iron ore production to 86.5 Mt (on a 100% basis). This brings RIO’s total iron ore output for 2024 to 328 Mt, a decline of 1% year over year, within its guidance of 323-338 Mt. Production was affected by depletion, predominantly at Paraburdoo, as the company is transitioning to Western Range and Yandicoogina, as well as higher-than-average rainfall.
Rio Tinto’s shipments declined 1% year over year to 328.6 Mt in 2024. The company expects Pilbara iron ore shipments (100% basis) to be in the band of 323-338 Mt in 2025.
Fortescue Ltd FSUGY reported iron ore shipments of 49.4 Mt in the second quarter of fiscal 2025 (ended Dec. 31, 2024), up 12% year over year. This was driven by an increase in volumes across both the Hematite Operations and Iron Bridge. This led to shipments of 97.1 Mt in the first half of fiscal 2024, the highest half-year shipments in Fortescue’s history.
Fortescue expects iron ore shipments to be in the range of 190 - 200Mt in fiscal 2024, including five – nine Mt for Iron Bridge (100% basis).
VALE Stock’s Price Performance & Zacks Rank
Shares of Vale have lost 17% in a year compared with the industry’s 15.2% decline.
Zacks Investment Research
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Vale currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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