The expectation is that the OK (VOUCH3) reaches the lower range of its annual production guidance of iron ore in 2022, evaluates the Activate Investments. According to the broker’s estimates, the mining company should report an ore production of 83 million tons in the fourth quarter of 2022 (4Q22).
The company estimated production of 300 million tons of iron ore in the year.
Analysts explain that the last quarter of the year is seasonally favorable to sales. If this phenomenon materializes for Vale and sales become more concentrated closer to the end of the year, the mining company could benefit, since the reference ore ended the year at US$ 114.
Still due to sales, one can expect a naturally more pressured cash flow due to higher working capital.
As for ore premiums, analysts expect numbers close to those of the third quarter of 2022 (3Q22), when they totaled US$ 6.6 per ton.
The margins of Chinese steelmakers are still “very bad”. “Let us remember that in 3Q, the premium for pellets was high, which favored Vale’s margin, which should not be repeated in 4Q22”, they assess.
Vale is expected to release its balance sheet on February 16, after the market closes.
What to expect from Vale’s base metals?
Ativa analysts claim that, on the base metalsthe news should be positive as both copper and nickel benchmark prices advanced.
As Vale accumulated inventories over the first three quarters of 2022, a higher sales volume is expected between October and December.
However, they draw attention to the maintenance of Salobo — the company’s main copper site in the country — in the quarter, “which could negatively impact the segment’s margins”.
4Q22 earnings schedule: See dates and times for disclosure of balance sheets for companies on the Exchange (B3)
I am an author and journalist with a focus on market news. I have worked for a global news website for the past two years, writing articles on a range of topics relating to the stock market. My work has been published in international publications and I have delivered talks at both academic institutions and business conferences around the world.