2Q Production Report is Good Enough

Research evidence excerpt

2Q Production Report is Good Enough

Latin America | Metals & Mining

Vale EquityJulyResearch21, 2026

ESTIMATE CHANGE2Q Production Report is Good Enough

Vale reported better-than-expected 2Q production in iron ore, although sales RATING BUY

volumes just met expectations. Realized iron ore prices fell slightly in 2Q PRICE $14.25^

while costs likely rose. Copper production and sales beat, while nickel volumes PRICE TARGET | % TO PT $21.00 | +47%

were modestly below what we and consensus had anticipated. FY production 52W HIGH-LOW $17.94 - $9.36

guidance is all unchanged. This is basically a neutral production report for Vale, FLOAT (%) | ADV MM (USD) 104.0% | 313.29

in our view. The main unknown w.r.t. results is unit costs. Reiterate Buy. MARKET CAP $60.8B

TICKER VALE

Iron Ore Basically In-line Operationally: Vale's 2Q iron ore production of 84.3mt (vs VA consensus ^Prior trading day's closing price unless otherwise noted.

of 82.2mt and JefE of 84.1mt) was up 0.8% y/y and up 21% versus 1Q due to typical seasonal

improvements. Iron ore fines sales of 69.9mt increased 3.4% y/y but missed consensus of 70.9mt

and was also lower than our forecast. Pellets production fell 7% y/y to 7.3mt, which missed both FY (Dec) CHANGE TO JEFe JEF vs CONS

consensus and our expectation of 7.6mt. Pellet sales of 7.7mt were better than we had expected 2026 2027 2026 2027

and above consensus of 7.3mt. Vale's average realized price for iron ore fines of $95/t fell 1% q/q EBITDA -2% NM NM +8%

while costs likely increased vs 1Q (despite higher volumes) due to higher energy prices and other EPS -2% NM -8% +25%

war-related inflationary factors. Vale's average realized pellets price increased by $3.2/t vs 1Q, partly

offsetting the cost inflation we expect in pellets for 2Q. 2026 ($) Q1A Q2 Q3 Q4 FY