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Vale's Q2 Production Volumes Drop Y/Y, Up Q/Q - Analyst Blog

Vale S.A. ( VALE ) reported disappointing second-quarter production volumes for most of its commodities. Most products including nickel, copper, coal, manganese and potash suffered a year over year decline; with only iron ore, pellets and manganese recording an increase. On a quarter-over-quarter basis, production of iron ore, pellets, coal, manganese and phosphate rock increased, while that of nickel, copper and potash decreased.

Production of iron ore reached a record level in the second quarter, growing 12.6% year over year to 79.4 million tons. The increase was primarily due to favorable weather conditions and improved production in Carajás Plant 2 and the new Conceição Itabiritos plant in the Southeastern System.

Pellet production increased 2.4% to roughly 10 million tons owing to better performance of the Samarco mine. Coal output reached 2.2 million tons, 23.8% higher than in the first quarter, largely backed by stronger performance of Carborough Downs and Moatize mines.

Nickel production totaled 61,700 tons, 8.6% lower than in the previous quarter. The decline was a result of planned maintenance work carried out in the Sudbury acid plant and furnaces. Further, manganese production dropped 18.1% year over year to 505,000 tons, owing to a decline in Carajás Azul manganese mine.

Vale is expected to release its second-quarter 2014 results on Jul 31. The Zacks Consensus Estimate for the same is pegged at 44 cents, reflecting a year over year decline of 29.0%.

With a market capitalization of $75.0 billion, Vale holds a Zacks Rank #4 (Sell). Some better-ranked stocks in the industry include Alderon Iron Ore Corp. ( AXX ), Olympic Steel Inc. ( ZEUS ) and ThyssenKrupp AG ( TYEKF ). Each of these stocks carry a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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