Vale SA, a leading global supplier of iron ore, has revised its production forecast for 2026, citing moderating global demand and increasing supply from African sources. The Brazilian company announced a revised target of 335 million to 345 million tonnes of iron ore for 2026, down from its previous projection of 340 million to 360 million tonnes. Vale anticipates delivering approximately 335 million tonnes this year, aligning with the higher end of its guidance.
Vale, headquartered in Rio de Janeiro, is one of the world’s largest mining companies, specialising in iron ore production. The company also has operations spanning across various other metals and mining sectors. Once the world’s foremost iron ore producer, Vale’s output was significantly impacted by a tailings dam collapse in Brazil in 2019, causing it to cede the top position to Rio Tinto Group. The company has since faced challenges in restoring its production to previous levels of 385 million tonnes.
Despite the reduced forecast, Vale’s chief executive, Gustavo Pimenta, indicated expectations for stable steel production in China at around 1 billion tonnes annually, with growing demand from emerging markets like India and Vietnam. Iron ore prices have seen a moderate increase this year, maintaining a level above $US100 per tonne since early August. However, some analysts predict a potential decline below $US100 next year due to increased supply from major miners and the Simandou project in Guinea, coupled with a potential slowdown in Chinese demand.
Vale projects capital expenditure between $US5.4 billion and $US5.7 billion for the coming year, a reduction from the prior forecast of $US6.5 billion. Throughout the current year, the company has twice adjusted its full-year investment forecast, settling at $US5.5 billion. This figure is closely monitored by investors as it provides insights into potential shareholder payouts.
