Vale´s Production Report for the first quarter of 2020 (1Q20) was announced on Friday, April 17th. Overall, in 1Q20, production across Vale's businesses suffered limited impact due to the COVID-19 pandemic.
Sales volumes of iron ore fines and pellets reached 59.0 Mt, in line with production in 1Q20. The share of premium products totalled 87% in 1Q20.
Vale's iron ore fines production totalled 59.6 Mt, therefore below the production guidance of 63-68 Mt for 1Q20. The main causes for that result are: (i) losses of 4.5 Mt in the Northern System from (a) unscheduled maintenance of the long distance conveyor belt at S11D; (b) concentrated, stronger-than-usual weather-related conditions, especially in March; (c) operational restrictions at the Northern Range connected to the postponement of the startup of the new Morro 1 mining section; (ii) losses of 1.8 Mt from lower third-party purchases, due to reduced availability caused by the heavy rains in the southeast of Brazil; and (iii) losses of 2.1 Mt from a number of operational issues in the Southeastern System, mainly in the Itabira Complex.
Vale revised its guidance for iron ore fines production in 2020 to 310-330 Mt from 340-355 Mt and its pellet production guidance to 35-40 Mt from 44 Mt.
Vale's sales volume in 2020 may change according to market conditions and Vale's strategy of margin over volume, prioritizing blended products in its portfolio and the replenishment of inventories in 2020 as appropriate.
The company is continuously evaluating the impact of the COVID-19 pandemic on its business and will disclose promptly any further material impact on its operations, supply chain or customer demand.