Brazilian mining firms reported positive 1H21 results, benefiting mostly from demand in China, which kept prices high.
Brazil’s main iron ore producer, Vale, posted a net profit of USD 7.59 billion in the second quarter, up from USD 995 million a year ago. For the second half, Vale is planning to increase iron ore output to meet this year’s production target.
Iron ore prices keep hovering around USD 180/t and Vale executives said the company is profitable at USD 45/t, due to the high-quality metal the company produces.
Revenue of CSN Mineração, another relevant producer and a unit of steelmaker CSN, increased 34% to 7.35 billion reais (USD 1.42 billion).
“In 2Q21, despite China’s efforts to contain rising commodity prices and steel production levels in the country, the price of iron ore remained at a very high level throughout the quarter supported by a heated demand for iron ore, especially when considering the limited supply in the seaborne market,” the company said in a statement.
But pressure from China to reduce iron ore prices could lead to delays in Brazilian mining projects, an analyst said. “If China, as the world’s biggest consumer, has power to determine in part performance of commodity prices, using its stocks, mining firms have also great manipulative power over prices, to avoid a sharp drop,” Pedro Galdi, a mining analyst at Mirae Asset Management, told BNamericas.
