Rodolfo Angele

Rodolfo Angele asked Rogério Nogueira for an assessment of the iron ore business environment and prices for 2026, considering investor bearishness, new capacity like Simandou, and China's record imports despite peak steel production. He then asked Shaun Usmar about the timing and detail of additional information on Base Metals' development plans, specifically regarding CapEx intensity and expected returns, to help investors price in Vale's copper growth story.

Answer

Rogério Nogueira, EVP of Commercial and Development, Vale S.A., indicated good fundamentals for steel and iron ore globally, with China's infrastructure and manufacturing supporting demand despite property sector challenges. He expects China's crude steel production for 2026 to be similar to last year, with iron ore supply and demand remaining balanced. Nogueira noted that while Chinese port inventories are high, consolidated inventories with steel mills remain within a typical range, pointing to a healthy price level for 2026 despite volatility. He added that Simandou's volumes will be offset by industry depletion. Shaun Usmar, CEO of Vale Base Metals, highlighted the under-recognized copper growth profile and VBM's focus on immediate-term delivery. He detailed projects like Bacaba, Salobo's particle flotation, and Alemão, emphasizing their dramatically low capital intensity and high returns (e.g., Bacaba's returns from mid-teens to over 50%). Usmar confirmed that technical studies and execution details are mapped out, accelerated, and will be presented at an upcoming investor day, along with exciting exploration results.

Rodolfo Angele asked Rogério Nogueira for Vale's assessment of the 2026 iron ore business environment and prices, considering investor bearishness, Simandou's emergence, and record Chinese imports despite peak steel consumption. For Shaun Usmar, he inquired about the expected timeline for more detailed development plans for Vale Base Metals' growth projects, which investors are not yet pricing in, and sought comments on the CapEx intensity of these projects relative to the industry.

Answer

Rogério Nogueira, EVP of Commercial and Development, Vale, indicated good fundamentals for steel and iron ore globally, expecting China's crude steel production to remain stable in 2026, with positive market conditions outside China. He projected a balanced iron ore supply/demand at 1.65 billion tons and stable Chinese imports, noting that high port inventories are offset by steel mill inventories, maintaining a typical 35 days of consumption. He concluded that fundamentals point to healthy prices for 2026, with Simandou volumes offset by industry depletion. Shaun Usmar, CEO of Vale Base Metals, highlighted that VBM's projects, like Bacaba and Salobo coarse particle flotation, have dramatically low capital intensity, with returns increasing significantly due to restructuring and brownfield nature. He confirmed that detailed project plans, including technical studies and operational improvements, will be discussed at an upcoming Investor Day, emphasizing the underappreciated exploration potential.