On Thursday, the iron ore price continued to drift lower, but held above the psychologically important $60 a tonne level after top producer Vale said it will ramp up output sharply over the next two years.
The benchmark price for Northern China 62% Fe ore lost 0.8% to trade at $60.60 a tonne. Iron ore has pulled back nearly 24% from its 2017 opening levels, but year-to-date the price is averaging $71.60 a tonne compared to $56.50 over the course of 2016.
Rio de Janeiro-based Vale on Thursday announced a nearly four-fold increase in net income to $2.23 billion during the third quarter thanks to the higher iron ore price. It was below consensus estimates however and Amos Fletcher, a Barclays analyst, told the miss may have been due to lower shipping volumes as Vale "held back iron ore inventories in expectation of higher prices ahead."
Vale sold 76.4m tonnes of iron ore during the third quarter, 2.2m tonnes more than the same period last year. That compares with production during the quarter of a record 95.1 million tonnes as its massive S11D mine in the Amazon continues to ramp up.
For 2017 the Brazilian miner expects to produce 360–380m tonnes, but in comments with the release of the financial results Vale said ore production will grow to 390m tonnes next year and 400m tonnes in 2019.
