Vale’s Q3 pellet output up 1.6% on Oman performance

Vale’s iron ore pellet output increased by 1.6% in the third quarter of 2012 compared with the corresponding period last year, driven by a 59.8% rise at its plants in Oman.

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Production came to 14.46 million tonnes, against 14.23 million tonnes a year earlier, the miner said late on Wednesday October 17.

Pellet output at its Omani operations totalled 1.84 million tonnes between July and September, up from 1.15 million tonnes in the third quarter last year.

Vale observed, however, that the slowdown in global industrial production has weakened the demand for steel, stimulating a cyclical change in its consumption of key raw materials.

This ultimately led to lower premiums for high-quality iron ore, and the partial replacement of pellets by sinter feed for blast furnaces.

“In response to this cyclical movement, the pace of operating activity at some of our pellet plants – Tubarão I & II, São Luís, Vargem Grande, Kobrasco, Hispanobras and Itabrasco – was moderated during the third quarter of 2012,” it said.

The Tubarão I & II plants in Brazil produced 1.46 million tonnes of pellets in the third quarter, down by 6.4% year-on-year.

Pellet production at Fábrica fell by 14.8% to 1.13 million tonnes, while output at Itabrasco declined by 10.6%, totalling 985,000 tonnes.

Following this, Vale announced on October 4 it would cut pellet production by nearly 20% from October, around 18.3% of its total production.

Operations at the San Luís pellet plant in Brazil’s Maranhão state and the Tubarão I & II plants in Espírito Santo state were to be temporarily halted on October 8 and November 13, 2012, respectively.

Between January and September this year, Vale produced 41.4 million tonnes of pellets, up by 3.8% compared with the corresponding period in 2011, when this volume was at 39.8 million tonnes.

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