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Vale's (VALE) Q4 Iron Ore & Copper Output Up Y/Y, Nickel Lags
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Vale S.A. (VALE - Free Report) reported iron ore production of 89.4 million tons (Mt) for the fourth quarter of 2023, which was up 11% year over year. The overall iron ore production for 2023 was around 321 Mt in 2023, marking a 4.3% rise from the 2022 figure. Surpassing the company's projected range of 310-320 Mt, this improvement can be attributed to Vale's persistent efforts to enhance asset reliability at the S11D mine, strong performances at the Itabira and Vargem Grande complexes, and increased third-party purchases.
Pellets production rose 19% year over year to 9.9 Mt in the fourth quarter. Iron ore fines and pellet sales were flat compared with the year-ago quarter at 88.2 Mt in the fourth quarter.
The average realized iron ore fines price was $118.3 per ton in the fourth quarter, up 23.7% year over year and 12.6% sequentially, mainly due to higher benchmark iron ore prices and a positive impact from forward price adjustments.
Copper Output Up, Nickel Lags
In the fourth quarter of 2023, Vale produced 99.1 kt of copper, which marked a 49.5% year-over-year growth, thus benefiting from the steady ramp-up of Salobo III as well as better performance of Sossego’s plant. Production at the Salobo complex surged 87% year over year in the quarter. Vale sold 97.5 kt of copper, which was up 36.2% from the year-ago quarter.
Copper production for 2023 was up 29% year over year to 326.6 kt. Vale’s copper production guidance for 2023 was 315-325 kt. Copper sales recorded for the year were 307.8 kt, up 26% from 2022.
Production of nickel declined 5.3% year over year to 44.9kt in the October-December period. This was due to the ongoing transitioning of Voisey’s Bay mine to underground operations as well as the planned furnace rebuild at Onça Puma. Nickel sales were recorded at 47.9 kt, down 17.7% from the year-ago comparable quarter’s figure.
In 2023, the total production of nickel was recorded at 164.9 kt, which was down 7.9% year over year. VALE had expected nickel production in 2023 to be between 160 kt and 175 kt. Nickel sales were down 7% year over year to 167.9 kt.
Guidance for 2024
The company’s iron ore production guidance for 2024 is 310-320 Mt. The copper production guidance is 320-355 kt. VALE expects nickel production in 2023 to be between 160 kt and 175 kt. Pellets production is projected to be between 38 Mt and 42 Mt for 2024.
Peer Performance
Rio Tinto Group (RIO - Free Report) recently reported a 2% decrease in fourth-quarter 2023 iron ore production to 87.5 Mt. Iron production was 331.8 Mt in 2023, up 2% from the prior year, aided by its efforts to improve productivity, supported by the ongoing implementation of the Safe Production System and the ramp up at Gudai-Darri. Copper output for the year was 620 Kt, up 2% year over year.
RIO expects Pilbara iron ore shipments (100% basis) between 323 Mt and 338 Mt in 2024. The midpoint of the range indicates a year-over-year dip of 0.4%.
BHP Group’s (BHP - Free Report) iron ore production dipped 2% year over year to 65.8 Mt in the quarter ended Dec 31, 2023. In the six-month ended Dec 31, 2023 iron ore production was down 2% to 129 Mt. The company witnessed lower production at Western Australia Iron Ore (WAIO), due to the continued tie-in activity for the Rail Technology Program and the impacts of the ongoing ramp-up of the Central Pilbara hub.
BHP witnessed year-over-year improvement in the output for copper, nickel and energy coal, while metallurgical coal was down in the first half of fiscal 2024.
BHP’s iron ore production guidance for fiscal 2024 is 254 – 264.5 Mt. WAIO's production is expected between 250 Mt and 260 Mt (282 Mt and 294 Mt on a 100% basis).
Price Performance
Shares of Vale have declined 25% in a year compared with the industry's 24.4% fall.
Cameco has a projected earnings growth rate of 188% for the current year. The Zacks Consensus Estimate for CCJ’s current-year earnings has been revised 12.5% upward in the past 60 days. The stock is up around 68.1% in a year.
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Vale's (VALE) Q4 Iron Ore & Copper Output Up Y/Y, Nickel Lags
Vale S.A. (VALE - Free Report) reported iron ore production of 89.4 million tons (Mt) for the fourth quarter of 2023, which was up 11% year over year. The overall iron ore production for 2023 was around 321 Mt in 2023, marking a 4.3% rise from the 2022 figure. Surpassing the company's projected range of 310-320 Mt, this improvement can be attributed to Vale's persistent efforts to enhance asset reliability at the S11D mine, strong performances at the Itabira and Vargem Grande complexes, and increased third-party purchases.
Pellets production rose 19% year over year to 9.9 Mt in the fourth quarter. Iron ore fines and pellet sales were flat compared with the year-ago quarter at 88.2 Mt in the fourth quarter.
The average realized iron ore fines price was $118.3 per ton in the fourth quarter, up 23.7% year over year and 12.6% sequentially, mainly due to higher benchmark iron ore prices and a positive impact from forward price adjustments.
Copper Output Up, Nickel Lags
In the fourth quarter of 2023, Vale produced 99.1 kt of copper, which marked a 49.5% year-over-year growth, thus benefiting from the steady ramp-up of Salobo III as well as better performance of Sossego’s plant. Production at the Salobo complex surged 87% year over year in the quarter. Vale sold 97.5 kt of copper, which was up 36.2% from the year-ago quarter.
Copper production for 2023 was up 29% year over year to 326.6 kt. Vale’s copper production guidance for 2023 was 315-325 kt. Copper sales recorded for the year were 307.8 kt, up 26% from 2022.
Production of nickel declined 5.3% year over year to 44.9kt in the October-December period. This was due to the ongoing transitioning of Voisey’s Bay mine to underground operations as well as the planned furnace rebuild at Onça Puma. Nickel sales were recorded at 47.9 kt, down 17.7% from the year-ago comparable quarter’s figure.
In 2023, the total production of nickel was recorded at 164.9 kt, which was down 7.9% year over year. VALE had expected nickel production in 2023 to be between 160 kt and 175 kt. Nickel sales were down 7% year over year to 167.9 kt.
Guidance for 2024
The company’s iron ore production guidance for 2024 is 310-320 Mt. The copper production guidance is 320-355 kt. VALE expects nickel production in 2023 to be between 160 kt and 175 kt. Pellets production is projected to be between 38 Mt and 42 Mt for 2024.
Peer Performance
Rio Tinto Group (RIO - Free Report) recently reported a 2% decrease in fourth-quarter 2023 iron ore production to 87.5 Mt. Iron production was 331.8 Mt in 2023, up 2% from the prior year, aided by its efforts to improve productivity, supported by the ongoing implementation of the Safe Production System and the ramp up at Gudai-Darri. Copper output for the year was 620 Kt, up 2% year over year.
RIO expects Pilbara iron ore shipments (100% basis) between 323 Mt and 338 Mt in 2024. The midpoint of the range indicates a year-over-year dip of 0.4%.
BHP Group’s (BHP - Free Report) iron ore production dipped 2% year over year to 65.8 Mt in the quarter ended Dec 31, 2023. In the six-month ended Dec 31, 2023 iron ore production was down 2% to 129 Mt. The company witnessed lower production at Western Australia Iron Ore (WAIO), due to the continued tie-in activity for the Rail Technology Program and the impacts of the ongoing ramp-up of the Central Pilbara hub.
BHP witnessed year-over-year improvement in the output for copper, nickel and energy coal, while metallurgical coal was down in the first half of fiscal 2024.
BHP’s iron ore production guidance for fiscal 2024 is 254 – 264.5 Mt. WAIO's production is expected between 250 Mt and 260 Mt (282 Mt and 294 Mt on a 100% basis).
Price Performance
Shares of Vale have declined 25% in a year compared with the industry's 24.4% fall.
Image Source: Zacks Investment Research
Zacks Rank & a Stock to Consider
Vale currently carries a Zacks Rank #4 (Sell).
A better-ranked stock in the Basic Materials space is Cameco Corporation (CCJ - Free Report) , which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Cameco has a projected earnings growth rate of 188% for the current year. The Zacks Consensus Estimate for CCJ’s current-year earnings has been revised 12.5% upward in the past 60 days. The stock is up around 68.1% in a year.