Brazilian miner Vale's third-quarter net profit fell 53% to $1.26 billion, below analysts' forecasts, as lower iron ore prices and higher costs including freight hit earnings. Iron ore output fell 6% to 88.4 million tonnes.
At a glance
- Analysts polled by Visible Alpha had expected net profit of $1.70 billion.
- Vale expects to reach the lower end of its 2026 output forecast of 335 million to 345 million tonnes.
- UBS estimates 150 million to 170 million tonnes of global iron ore supply is losing money at current prices.
Background
Vale is one of the world's largest iron ore producers, and iron ore is the main raw material for steel. Prices have fallen as Chinese steel demand weakens. Higher shipping costs have also led some smaller Brazilian producers to curb output, Bloomberg reported.
What happened
Vale reported a third-quarter net profit of $1.26 billion on Thursday, down 53% from a year earlier, Reuters reported via Mining Weekly. Analysts in a Visible Alpha poll had expected $1.70 billion. Adjusted earnings before interest, tax, depreciation and amortisation fell 24% to $3.33 billion.
Iron ore output fell 6% to 88.4 million tonnes, short of the 90.1 million tonnes analysts expected, because of weaker results at Vale's Serra Norte complex.
Why profit fell
Lower iron ore prices and higher costs, including freight, hit earnings. Vale said it is confident of reaching the lower end of its 2026 output forecast of 335 million to 345 million tonnes.
What it means for iron ore
Iron ore's fall below $90 a tonne has pushed as much as 170 million tonnes of production into losses, UBS's Lachlan Shaw said, Bloomberg reported. Singapore futures have closed below $90 twice in two weeks, down from a May peak of $111.60.
Prices may need to stay low for longer before enough supply shuts to tighten the market, Shaw said. Producers of 15 million to 20 million tonnes a year have already cut output or signalled cuts.
Our read
Outlook: bearish. Falling iron ore prices are squeezing even the largest producers, though high-cost supply cuts could eventually support prices.
What to watch
- Whether Vale meets the lower end of its 2026 output forecast.
- Output cuts by high-cost iron ore producers.
- Iron ore prices around $90 a tonne.
For information only, not investment advice.
Iron price in India
metalscost.com India reference price as of 2026-11-01.
Detailed analysis
Timeline
- 2026-10-29: Vale reports a 53% fall in third-quarter net profit.
Supply Drivers
UBS estimates 150 million to 170 million tonnes of iron ore supply is losing money below $90 a tonne.
Mining Production
Vale's iron ore output fell 6% to 88.4 million tonnes on weaker results at Serra Norte.
What could lift prices
- Up to 170 million tonnes of supply is losing money, which could force cuts.
- Vale's output is tracking the low end of its forecast.
What could weigh on prices
- Iron ore prices have fallen from $111.60 in May to around $90.
- High-cost producers may keep running for now because closures are costly.
Country impact
| Country | Impact | Reason |
|---|---|---|
| Brazil | Medium | Its largest miner posted a sharp fall in profit. |
| China | Medium | Weak steel demand there is keeping iron ore prices low. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Iron Ore Mining | Negative | Lower prices and higher costs are squeezing miners' profits. |
Who gains, who loses
- Steelmakers: They pay less for iron ore than earlier this year.
- Vale shareholders: Net profit fell 53% and missed forecasts.
Other ways this could play out
- If prices stay below $90, more high-cost supply could shut and support prices.
- If Chinese steel demand weakens further, prices could fall even with some cuts.
Price risks
- Freight costs could keep rising for Brazilian exporters.
- Further weakness in Chinese steel output would hit iron ore demand.
Technical view
Price is trading below both its 20-period and 50-period moving averages, a bearish alignment.
Computed from metalscost.com's own stored price history.
Brazil
China