Vale to halt output at Brazil iron ore pellet plants

Thu Oct 4, 2012 3:17pm GMT
 

* To suspend Sao Luis, Tubarao output; cites slow demand

* Mine output to increase sinter feed over pellet feed

* Three plants produced 4.93 mln tonnes of pellets in H1

RIO DE JANEIRO, Oct 4 (Reuters) - Brazil's Vale SA said on Thursday that it plans to suspend operations at three Brazilian iron ore pellet plants and increase output of lower-value mine products as world steel demand slows.

With the pellet plant operation suspended, Vale said in a statement that it will adjust mine output to produce more sinter feed and less pellet feed. Vale's Sao Luis and Tubarao I and Tubarao II pellet plants will go off line starting on Oct. 8.

Pellet feed, like sinter feed, is a form of concentrated iron ore. Pellet feed, though, is filtered to cut water content before being mixed with clay and other materials at a pellet plant. Pellets can be fed directly into a steel blast furnace.

Sinter feed needs additional processing before being used to make steel.

"This is in response to the evolution of the composition of demand for raw materials by the steel industry during the economic cycle which has shown a reduction in demand for pellets," the statement said.

World steelmaking capacity is about a third greater than demand, according to Brazil's state development bank BNDES. Vale, which produces more than a quarter of the world's seaborne, intercontinental iron ore exports, is reviewing its investment plans after a plunge in iron ore prices.

The three pellet plants produced 4.93 million tonnes of pellets in the first half of 2012, Vale said.

Market Update

  • Africa
  • US
  • Europe
  • Asia
UK £ USD =1.6805
Euro USD =1.3813
Rand USD =0.0957