Continued Chinese demand for iron ore boosted Brazilian miner Vale’s profit to $1.1bn.
Total volume of iron ore and pellets sold in 2009 was 247.2Mt, compared to 296.2Mt in 2008. It explained the decrease due to the fall in demand for iron ore during the first half of last year.
It reached a record sales volume to China, 140.3Mt, an increase of 49Mt from 2008. It predicted a more balanced expansion of the Chinese economy in 2010, leading to more growth. Chinese iron ore imports in 2009 reached an all-time high of 627.8Mt, up 41.6% year-on-year, driven by steel production growth and the increasing reliance on imported iron ore.
It expects Chinese imports to remain at a high level in 2010 primarily due to strength in the final demand for carbon steel. The increase in capacity rates of the steel industry in Japan, Korea, Brazil and Europe, although below pre-crisis levels, coupled with very large Chinese import volumes, has produced a dramatic change in the global iron ore market from surplus to excess demand and a surge in spot prices.
It warned it faces a tight situation in 2010, as even running its iron ore mines at full capacity it would struggle to meet customer demand. Its largest projects are scheduled to come on stream in 2012, with only a small capacity increase in the near term: it is expecting a 10Mt/y rise in capacity at its Carajás site in 2H10 and nothing scheduled for 2011.