In a bid to boost iron-ore rebound, Vale has lowered its production guidance

Vale SA has lowered its production guide for 2021 and given a lower-thanexpected projection for 2022, providing much-needed supplyside support to a fledgling rebound in iron ore prices.

In 2021, the world's second-largest producer of steelmaking material expects to produce 315-320 million metric tonnes, up from 315-335 million tonnes previously forecast. Vale forecasts 320-335 million tonnes in 2022, compared to analysts' consensus of 346 million tonnes.

After iron ore futures fell in recent months as China curbed steel output to manage pollution and power use, Vale is defending margins by withholding some lower-quality supply and seeking $1 billion in cost cuts.

Marcello Spinelli, head of iron ore, said in December at the Brazilian mining giant's annual investor day at the New York Stock Exchange, "Value over volume is our slogan." "We will not produce if the market does not demand it." dam catastrophe in early 2019 makes it a major supply swing factor.

The updated guidance could help to sustain the recent rally in iron ore prices, which has been fuelled by optimism over Chinese mill restocking. Despite this, Vale continues to aim for an annual production capacity of 400 million tonnes, which could reclaim its position as the world's top iron ore producer, which it lost to Rio Tinto Group following the Brumadinho dam disaster. Vale pushed back its capacity target in September, from 2022 to "medium term," citing sluggish permits as a reason.