Vale to report strong results in 2021 despite limited output

Friday, 08 January 2021 22:07:36 (GMT+3)   |   Sao Paulo

Brazilian miner and iron ore producer Vale is expected to report strong results in 2021, despite a still limited output forecast, according to analysts.

A media report from Agencia CMA said appreciated iron ore export prices and a Vale’s potential agreement with the state of Minas Gerais to settle a Brumadinho dispute will likely offset downsides for the miner.

Vale estimated an iron ore output guidance of 315-335 million mt for 2021, as reported by SteelOrbis, down from a previous estimate of 375-395 million mt. Vale’s guidance for 2020 was 300-305 million mt.

Pedro de Marco, analyst at Reach Capital, said Vale can offer higher quality iron ore to offset the limited output. The analyst said production of high quality iron ore out of its Norte production system is increasing.

Henrique Esteter, analyst at Guide Investimentos, Vale should still benefit from appreciated iron ore prices in 2021.

Analysts at Bradesco BBI said negotiations for a deal with the state of Minas Gerais over Brumadinho are “at an advanced stage,” with Vale already suggesting a provision of BRL 21.6 billion for such potential agreement ($4 billion).

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