Iron ore majors ramp up supply even as China faces challenges
Iron ore is one of the year’s worst performing major commodities, slumping by almost a quarter as China’s property crisis drags on.
Brazil’s Vale, one of the world’s largest miners, reported a first quarter net profit down 59% from a year earlier, far below analyst expectations, as profits were dragged down by weaker sales and lower iron ore prices.
The company posted a net profit of $1.8 billion for the first three months of 2023, in a filing to Brazil’s main stock exchange on Wednesday, while analysts polled by Refinitiv had forecast a profit of $2.4 billion.
Last week, the miner had already reported a slip in iron ore sales volume, blaming it on port loading restrictions and supply chain rebalancing after strong sales in the previous quarters.
Revenues, meanwhile,fell 22% to $8.4 billion, also lagging analysts’ $9.2 billion forecast. Meanwhile, costs rose 5.4% to $5.4 billion.
Earnings before interest, taxes, depreciation and amortization came in at $3.6, below analysts’ $4.3 billion estimate.
Over the quarter, Vale said that prices for its iron ore had averaged $108.6 per tonne, down from the $141.4 per tonne it reported for the same period last year.
(By Peter Frontini; Editing by David Alire Garcia and Sarah Morland)
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