Vale saw Q3 profits rise for the first time since 2011 as net income soared to $3.5 billion — more than 50% over $1.64 billion, year-on-year, according to company officials. In all, China represented 40% of operating revenue in the quarter, up from one-third the year before.
As the leading iron ore producer, Vale benefited from cost cuts and asset sales, according to analysts, with prices averaging one-fifth higher in Q3 than 2012 year-on-year. But China’s steel mills, buoyed by its housing market, accounted for most of the profit, despite the twilight of the mainland’s commodities boom over the past decade.
Altogether, the Rio de Janeiro-based Vale sold 50.2% of its iron ore and pellet shipments to China in Q3, up from 49% in 2012; European sales, meanwhile, slipped to 17% from 18%. Net sales, meanwhile, rose 11% from 2012 to $12.7 billion, as ore volume sales rose 11% to 73.4 million tons.
China is the world's biggest steel producer and iron ore importer while Vale accounts for between one-quarter to one-third of global seaborne exports.
Vale saw other healthy improvements in its portfolio in Q3: Metallurgical coal output, for example, rose 51% to 1.73 million tons; nickel output rose 13% to 62,000 tons and copper rose 17% to 103,000 tons, according to company representatives. Gold output, meanwhile, rose 77% to 85,000 oz while silver output rose 18% to 483,000 oz.