Iron Ore Prices Fall, Vale's Net Profit Drops 17% in Q1

MiningWeekly, citing Reuters, reported that Vale, one of the world's largest iron ore producers, announced on the 24th that despite a decrease in costs, its net profit for Q1 fell by 17% due to a decline in iron ore prices.

In Q1, Vale's net profit was $1.39 billion, falling short of the $1.68 billion expected by analysts surveyed by the London Stock Exchange Group (LSEG).

The company stated that profits were mainly affected by the decline in iron ore prices, with cost-reduction measures and the appreciation of the Brazilian real against the US dollar partially offsetting the impact.

"We had a stable start to the year, in line with our 2025 management goals," Gustavo Pimenta, Vale's CEO, said in an earnings report.

"Costs are showing good momentum," he noted.

The company's earnings before interest, taxes, depreciation, and amortization (EBITDA) for Q1 was $3.12 billion, a 9% decrease, coming close to analysts' expectations of $3.16 billion.

The result was in line with expectations, with the cost burden being the lightest, according to Itau BBA. However, they added, "The impact of falling prices outweighed the growth in sales volume and cost reductions."

In Q1, Vale's so-called C1 cash cost fell by 11% to $21/mt. This cost is used to measure production expenses from the mine to the port.

Last week, the company's operational report showed that due to heavy rainfall, its iron ore production decreased by 4.5%, although Vale relied on inventory to increase sales volume.

Nevertheless, the market reference price for Vale's main product, iron ore, fell by 16%, putting pressure on its own selling prices and leading to a 4% decrease in net revenue to $8.12 billion, slightly higher than analysts' estimates of $8.03 billion.

Analysts at Banco Santander believe that Vale demonstrated "solid operational data," but that this data "has already been reflected in the prices."