Vale announced Q3 2022 iron ore production of 89.7 MMT (975ktpd), which is up from 74.1 MMT in Q2 (or 21%) and broadly in line with Q3 2021 production (89.4). Iron ore sales corresponded to 77% of Q3 production, which is down from 87% in Q1, and which compares the 2020 and 2021 average of 88% and 85%, respectively. The usual production-to-sales gap in Q3 results from transiting inventories across the supply chain, which Vale expects to revert in Q4, depending on market conditions. Of note, Vale maintains its iron ore production guidance of 310-320 MMT. For the remainder of the year, Vale’s iron ore guidance thus suggests a Q4 daily production level of ~949k tonnes per day – which suggest an uptick of 25% from H1 when the company produced 710ktpd in Q1 and 806ktpd in Q2.

Vale’s production targets are still meaningfully below 2018-levels, which is not bullish for dry bulk volumes, but the outlook for Q4 leaves upside to recent sales volumes and is still supportive of dry bulk tailwinds for the coming months.