Vale ( NYSE: VALE ) said Monday it expects to increase production of high-grade iron ore in the coming years as it sees the average premium for better quality rising in a tightening market.
Vale ( VALE ) plans to raise its output of high-grade agglomerates to 50M-55M metric tons in 2026, up from 32M tons in 2022, before jumping to ~100M tons after 2030, Reuters reports, citing a presentation to analysts.
The miner said segmentation and supply challenges in the global iron ore market likely will "further widen the quality gap" ahead, helping drive the average premium for higher grades to $8-$12/metric ton in 2026 from $7/ton last year, according to the report.
Iron ore supply is set to "stay tighter for much longer," Vale ( VALE ) said, as ~400M metric tons of depletion would require replacement by 2030.
Iron ore futures fell to near a 10-day low Monday following an order by Chinese authorities to cut production at the big Tangshan steelmaking hub .
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Vale plans more production of high-grade iron ore in tightening market