SMM News: in the first quarter of 2019, Vale's iron ore powder production was 72.9 million tons, down 28% from the previous month and 11% from the same period last year, mainly due to the follow-up effects of the Brumadi New Dam break event and unusually strong seasonal climate factors.
In the first quarter of 2019, Vale pellet production was 12.2 million tons, down 23 per cent and 5 per cent from the previous month and the same period last year, respectively. This was mainly due to the shutdown of some pelletizing plants after the Broomadi New Dam break incident and the planned maintenance of Tubalang and Oman pelletizing plants.
In the first quarter of 2019, iron ore powder and pellets sold 67.7 million tons, down 30 per cent from the previous month and 20 per cent from a year earlier. The reasons for the month-on-month decline include: (1) seasonal climate factors (14 million tons); (2) and stop production after dam break in Brumadi (7 million tons); (III) the new inventory management process implemented at Chinese ports affected the point in time for sales revenue recognition (6 million tons); (4) and abnormal rainfall affected shipments at Madeira Port in the northern system (5 million tons). These factors were partly offset by a decline in Chinese port inventories (3 million tons) in the quarter.
With regard to the above-mentioned inventory management process, in accordance with past practice, once a commercial agreement is reached, the ownership of the products located at the mixing port, whether or not the customer takes delivery of the goods, will be transferred to the customer and the sales revenue will be recognized. In the port, the iron ore sold has to be separated from the unsold iron ore to be picked up, resulting in a lack of flexibility in the yard, thereby limiting port capacity. Under the new approach, product ownership and sales revenue recognition are completed after the customer has received the goods, thus affecting the point in time of sales revenue recognition.
In the first quarter of 2019, premium products accounted for 81% of total sales, roughly the same as in the previous quarter. The quality premium for iron ore powder and pellets fell to US $10.7 per tonne in the current quarter from US $11.5 per tonne in the previous quarter, mainly due to a decline in the market premium for iron ore powder in Caracas. But this is partly offset by the favorable terms of the new contract for the sale of pellets.
In the fourth quarter of 2019, finished nickel production was 54800 tons, down 14.4 per cent from the previous month and 6.5 per cent from a year earlier. The main reasons are as follows: (1) the planned shutdown and maintenance of Matsuzaka Refinery in Japan led to the decrease of factory production in Indonesia, (2) the planned maintenance of Dalian nickel refinery in China led to the decrease of plant production in New Caledonia. (3) the time difference in the nickel processing chain leads to the decrease of the output of the Sudbury plant.
In the first quarter of 2019, copper production was 93800 tons, down 14.6 percent from the previous month and unchanged from the same period last year. The month-on-month decline was mainly due to a decline in the grade of mineral materials and a decrease in production in various factories.
In the first quarter of 2019, coal production was 2.2 million tons, down 29 per cent from the previous month and 9 per cent from a year earlier.
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