Vale’s Realized Prices, Costs Key to 1Q Results — Earnings Preview

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By Jeffrey Lewis

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Vale SA, the world’s biggest iron-ore miner, is scheduled to report first-quarter earnings results later Wednesday after the close of trading. Here’s what you need to know:

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SALES FORECAST: The Rio de Janeiro-based miner is expected to report sales of $10.97 billion, according to a survey of 12 analysts by FactSet, a decline from the $12.65 billion reported a year earlier.

EARNINGS FORECAST: Vale’s net income is expected to fall to $3.88 billion from $5.55 billion in the first quarter of 2021.


Realized Prices–Vale is a producer of high-quality iron ore, so the premium it receives for its ore will be important to its earnings. Higher realized prices should help compensate for a weather-related decline in production in the first quarter, according to analysts at XP Investimentos.

Cost Pressures–The lower production in the first quarter could lead to higher C1 costs per ton as the company’s fixed costs are spread out over the smaller output, XP said.

Ukraine Conflict–Logistics and supply concerns are the main factors affecting iron ore prices since the start of the Russian invasion of Ukraine in late February, XP said.
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Any comment in the earnings report on the conflict could be helpful to understand the impact on Vale’s results.

Write to Jeffrey T. Lewis at [email protected]


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