Vale SA hopes to increase its iron ore production next year, albeit at a slower rate than some analysts predict, which could add more volatility to steelmaking material prices after a fast year.
The management of the world's No. 2 producer said it plans to seek board approval Thursday for guidance between 330 million and 350 million metric tons for 2022, with knowledge of the matter and asked not to be identified as the talks are private. Valet declined to comment.
That will be higher than this year's production, which the company said last month will likely be in the lower half of the 315m to 335mt range. However, the midpoint of the considered 2022 guideline, if confirmed, will follow the estimates of an average of 345 million tons compiled by Bloomberg analysts.
The Brazilian company will present its 2022 projections for production, capital expenditure and other financial indicators at its annual investor day in New York on November 29.
Vale's struggle to survive the Brazilian tailings dam disaster makes it a major supply-side release factor. With the midpoint of the proposed 2022 guide coming in slightly below the average analyst's forecast, the company's outlook could provide support for a new recovery in iron ore prices.
After losing more than half of its value from mid-July to mid-November amid the Chinese downturn, iron ore futures have regained some ground amid possible stimulus in the Asian country.
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