SMM News: Brazilian Marcello Spinelli's new Chinese name is Sima Sheng. Multinational executives who often deal with China usually have an interesting Chinese name.
Sima Sheng has been to China many times. On August 13, he visited Chinese customers for the first time as CEO of Vale's ferrous metals business.
In January this year, a dam break occurred in Vale, causing many casualties in Brazil and interrupting Vale's production and operation. In June, Sima Sheng was appointed chief executive of Vale's ferrous metals business, directly responsible for the most important iron ore business of the world's largest iron ore supplier.
That evening, Sima Sheng was interviewed by the interface news and other media.
Sima Sheng did not forecast the future price of iron ore, but said that the future of two major factors will be the key to affect mining prices: winter steel production restrictions in China, and iron ore stocks rose.
In the past two years, the production of iron and steel in China has been limited in winter, which has affected the demand for raw material iron ore and minerals in iron and steel production. Both Vale and China's iron ore stocks fell in the first half of the year, affecting mining prices.
He believes that these two factors will also continue to have an important impact on mining prices in the future.
Iron ore prices have skyrocketed this year as a result of Vale's dam break, coupled with reduced shipments by BHP Billiton and Rio Tinto, two other big iron ore suppliers, as a result of the March hurricane. After the major miners gradually resumed supply, iron ore prices began to fall again, out of a skyrocketing and plummeting route.
On Aug. 13, the spot price index of 62 per cent iron grade Platts iron ore was $88.80 / tonne, down nearly 30 per cent from its peak of $126.4 a tonne on July 3 and still up about 23 per cent from $72.40 a tonne at the start of the year.
Sima Sheng said that in the second half of the year, with the gradual recovery of iron ore supply from Vale, BHP Billiton and Rio Tinto, supply will be close to global demand for steel production, that is, supply and demand will be close to balance.
After the dam break in January, Vale shut down more than 90 million tons of production capacity.
According to Sima Sheng, Vale has gradually resumed production by dividing the production capacity of 90 million tons into three parts, and has resumed production of 30 million tons at present.
Of the 30 million tons in the second part, 12 million tons are in the process of reaching production. Sima Sheng said that the recovery of the remaining 18 million tons of capacity will need to be approved by Brazil's State Mining Agency and, after engineering tests, is expected to take another six to nine months.
The final capacity of 30 million tons, due to the use of wet mineral processing, the use of dams, need to do more work to resume production. "this is a medium-and long-term plan to resume production." Sima Sheng said.
Sima Sheng said that due to the smooth progress of the S11D project of Vale's northern system, the annual production capacity of the northern system is expected to reach 230 million tons, and Vale's iron ore and pellet sales this year can reach 307 million-332 million tons.
Sima Sheng also said that due to the impact of the mine accident at the beginning of the year, Vale will reduce sales of iron ore and pellets by more than 16 million tons in the second half of this year compared with the same period last year.
Vale has four iron ore producing areas in Brazil, namely, the northern system, the southeast system, the southern system and the central system, and the southeast system and the southern system are affected by the mine disaster.
In 2018, Vale produced a record 367 million tons of iron ore.
In addition to matters such as the resumption of iron ore production, Sima Sheng is embarking on work that includes further familiarity with the needs of the Chinese market.
China is Vale's biggest customer. The 2018 results show that the Chinese market accounts for more than 40 per cent of Vale's revenue.
Sima Sheng said it was confident in the Chinese market because steel production in China remained strong, driven by demand from industries such as manufacturing, infrastructure and real estate.
Chinese steel mills import their iconic Caracas powder, Brazilian mixed powder BRBF and pellets from Vale.
Based on China's strong crude steel production in June, China's annual crude steel production will reach 1.065 billion tons. In June, the average daily output of crude steel in China was 2.9177 million tons, an increase of 1.52 percent from the previous month, a record high.
"We are studying the possibility of expanding S11D quality iron ore production capacity by another 50 million tons." "as long as there is demand from Chinese customers, we can increase production," Sima Sheng told Interface News. "
The $20 billion S11D project, the world's largest iron ore project in recent years, is part of Vale's northern system and is designed to produce 90 million tons of iron ore a year. As the project reaches capacity, the northern Vale system will have a capacity of 240 million tons by 2022.
Sima Sheng has joined Vale since 2002 and has experience in logistics, operational efficiency, and establishing good relationships with communities and stakeholders.
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