The actions of OK (VALE3), as well as some of its competitors, collapsed this Tuesday (20th) on the Ibovespa, leading the index’s losses. The disappointing performance reflects the decision of the Chinese government, which the day before, kept the one-year base interest rate unchanged at 3.45%, which ends up affecting the entire sector.
Around 12.50pm, the Vale shares fell by 2.92%, trading at R$65.52. At the same time, according to Status Invest, shares of other companies in the sector, such as CSN (CSNA3) and CSN Mineração (CMIN3), fell by 3.33% and 2.05%, respectively.
Late last night, the central bank of Chinaknown as PBoCdecided to reduce the 5-year benchmark lending rate (LPR) by 25 basis points to 3.95%.
The cut, record and larger than expected, has the clear objective of reviving the most weakened subjects The Chinese real estate market, according to analysts at Capital Economics. On the other hand, the 1-year LPR remained unchanged at 3.45% for the sixth consecutive month.
“This interest is mainly used for real estate financing, which denotes that the government has tried to stimulate more and more this sector, which encounters difficulties and needs support to perhaps strengthen its demand,” says Lucas Serra, analyst at Toro . Investments.
Serra believes that a larger than expected interest rate cut is, in a certain sense, permissible, since inflation in China it is quite controlled and without imminent inflationary risks, at least in the short term. “On the contrary, inflation has recently remained at very low levels, which leaves room for this rate cut,” he adds.
However, Fábio Lemos, partner at Fatorial Investimentos, believes that despite the rate cut there is still great concern about the financial health of developers.
“There is therefore fear in new purchases, so much so that the number of new home sales in China fell sequentially. But it’s worth it, even with this fall into the mineralshould present good cash generation for the fourth quarter of 2023 and, in the opinion of some houses, be the ‘top pick’ in the sector with the prospect of good dividends”, he assesses.
Again with regards to the mining company, confirmation of the supply from the company arrived on Monday (19th). Australian BHP, Vale’s partner in Samarco, worth $3.5 billion. Analysts expect the Brazilian mining company to also set aside something similar in its fourth quarter 2023 results, which will be published next Thursday (22), after the market close.
Vale (VALE3): Iron ore production rises 10.6% in 4Q23 to 89.3 million tonnes
The production of iron ore from OK increased 10.6% in the fourth quarter of 2023 compared to the same period a year earlier, to 89.3 million tons, according to a filing with the Securities and Exchange Commission (CVM). Compared to the previous quarter, mineral production grew by 3.7%.
Last year, the Vale’s production reached 321.15 million tonnes, above the mining company’s projection of 315 million tonnes. According to Vale, this resulted in 4Q23 by Vale can be explained by the ongoing initiatives to improve the reliability of S11D, in addition to the solid performance in the Itabira and Vargem Grande complexes and increased third-party purchases.
“Vale’s performance in the fourth quarter was characterized by solid production and sales across all businesses. In December, monthly iron ore production was the highest since 2018,” Vale said in a report filed Monday 29 at the Securities and Exchange Commission (CVM).
In the pelletsone of the company’s major assets, production recorded an increase of 19.2% in the period, at 9.85 million tonnesmainly due to the start of briquette production, which began in the fourth quarter of 2023, an important step in the steel industry’s decarbonization strategy, through an increase in the supply of iron ore pellets.
In 2023, Vale’s pellet production was 36.45 million tonnes, up 3.5% year-on-year, but lower than Vale’s projection of 37 million tonnes.
Nickel production drops
A Vale’s nickel productionin turn, reached 44.9 thousand tons in the fourth quarter, 5.3% less than that recorded in the same period of 2022. Last year, production was 164.9 million tons, down by 7.9% compared to the previous year, in line with the estimate.
Due to the organization of some resources, including Voisey Baywhich moved into underground mining, as well as the renovation of Onca Pumathis decline in the nickel segment was already expected by the market.
In the quarter, the copper production reached 99.1 thousand tons, with an increase of 49.5% in the annual comparison. In 2023, production increased 29% year-on-year to 326.6 million tonnes, above the projection of 325 million tonnes, driven by the acceleration of Salobo 3, which ended up increasing production production by 87% in the quarter compared to year-on-year.
How did Vale’s sales go?
In the last quarter of 2023, Vale’s iron ore sales they decreased by 4.1% compared to the same period in 2022, for a total of 77.88 million tonnes. For the year, the mining company recorded revenue of 256.78 million tonnes, down 1.5% in the year-on-year comparison.
On the other hand, sale of pellets were equal to 10.285 million tonnes in the period, a value 17% higher than that recorded in the same quarter of the previous year. In 2023, sales increased by 8.1% and amounted to 35.84 million tons.
Already Nickel sales fell 17.7% in the fourth quarter of last year, at 47.9 thousand tons. In 2023, sales totaled 167.9 million tons, down 7.1% year-on-year.
In the quarter, copper sales from OK it was 97.5 thousand tons, with an increase of 36.2% in the annual comparison. Last year, sales increased 26.2% compared to 2022, totaling 307.8 million tonnes.
*With information provided by Estadão Conteúdo
Source: Terra
Rose James is a Gossipify movie and series reviewer known for her in-depth analysis and unique perspective on the latest releases. With a background in film studies, she provides engaging and informative reviews, and keeps readers up to date with industry trends and emerging talents.
