Steel Products Prices North America
Vale Has 2nd Best Quarter for Iron Ore
Written by Sandy Williams
November 7, 2013
Vale reported net earnings of $3.5 billion in the third quarter, up 120 percent from the same quarter in 2012. Iron ore production was 85.9 million tonnes, up 17.3 percent from the previous quarter and the second best quarter of production in Vale’s history. Iron ore production for the first nine months of 2013 was 226.6 million tonnes and the company expects to finish the year at 306 million tonnes.
Production of direct reduced pellets reached 12.4 million tonnes in the third quarter, similar to second quarter but 17.2 percent below 3Q 2012 levels due the shutdown of the Tubarao I and II and Sao Luis pellet plants.
The average realized price for iron ore was $105.58 per metric ton, up from $99.21 per metric ton in the second quarter. The average sales price of pellets was $149.66 per metric ton, up $2.73 higher than the previous quarter.
Stronger Chinese steel demand and a combination of low iron ore and steel inventories have influenced iron ore prices over the past few months said Vale. China’s crude steel output expanded 8.6 percent in the first nine months of 2013 while imports of iron ore grew 8.8 percent in the same period on a year-over-year basis. Vale expects iron ore to be around $130 per metric tonne in the fourth quarter.
TSI says ore forecasts vary
Reforms to be discussed by Chinese leaders next week are likely to support new economic growth in China said The Steel Index in its monthly outlook. According to TSI, iron ore price forecasts have varied depending on predictions of future ore supply. The forecasted surge in ore supply may be overblown according to HSBC which predicts supply growth of 3.7 percent in 2013, 5.5 percent in 2014 and 6.6 percent in 2015. Iron ore prices are, in general, expected to stay over $115 for the next two years. Australia’s Bureau of Resources & Energy Economics (BREE) in Australia revised its forecast for average spot iron ore prices in 2013 to US$125/tonne CFR China.
Sandy Williams
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