Investing.com -- Mining company Vale reported a 4% decrease in Q1 revenue compared to consensus expectations and a 1% decrease compared to Barclays’ estimates.

The company’s pellet sales were notably weak due to weather-related impacts. Despite the lower-than-expected Q1 revenue, the company’s production guidance for FY25 remains unchanged. However, it is anticipated that there could be downgrades to consensus EBITDA estimates ahead of Q1 results next week.

Vale’s Q1 iron ore production was 6% below Bloomberg consensus estimates. The Q1 production stood at 67.7 million tonnes, marking a 4% year-on-year decrease and a 21% quarter-on-quarter decrease. The lower production levels were due to heavy rains affecting the Northern system, a five-day blockage of the Carajas rail, and a 49-day maintenance period at the Caue plant.

Despite these challenges, the company’s FY25 production guidance remains unchanged at 325-335 million tonnes. Vale’s pellet production was notably weak, with a 15% decrease compared to Barclays’ estimates and a 23% decrease compared to consensus estimates. This was due to lower pellet feed availability and rainfall impacting the moisture levels of pellet feed.

Iron ore shipments for Q1 were 2% below consensus estimates, marking a 17% year-on-year decrease. During the quarter, Vale released 1.6 million tonnes of inventory. The grade of portfolio sales fell to 61.7% compared to 62.4% in Q4 and 62.3% in Q3. This decrease reflects a 129% quarter-on-quarter increase in high-silica product sales.

Vale’s realized iron ore price (excluding ROM) was 1% below consensus, reflecting the change in portfolio mix. Pellet shipments were 11% below estimates and 18% below consensus. However, the realized pricing was in line with consensus estimates, with a 1% decrease.

Overall, the iron ore division’s revenue, calculated as sales volumes times realized price, was 4% below consensus.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.