LONDON Vale SA will cut pellet production in October in the
face of falling demand.
Operations at Vales San
Luis pellet plant in Brazils Maranhao state and its
Tubarao plants in Espirito Santo state will temporarily halt
Oct. 8 and Nov. 13, respectively. The two plants produced 4.93
million tonnes of pellet in the first six months of 2012,
accounting for 18.3 percent of Vales total pellet
Vale said the production cut was
in response to changes in raw material demand from the steel
industry. "There is a contraction in pellet consumption in
favor of greater use of sinter feed," the Brazilian miner said
Vale said that an additional
portion of its iron ore production would be allocated toward
increasing the supply of sinter feed, reducing the availability
of feed for pelletizing.
The producer said that it
continues to invest in iron ore pellets and remains confident
in the long-term market fundamentals of the iron ore
Iron ore pellet prices have
fallen in line with iron ore fines prices in recent months.
AMM sister publication
Metal Bulletins 65-percent iron pellet index
dropped to as low as $110.43 per tonne c.f.r. China in the
first week of September before rebounding to $126 in the last
week of September.