Shares of Brazilian mining giant Vale SA (ADR) (NYSE:VALE) fell 2% on Friday morning after the company reported a 17% drop in first-quarter net profit, missing analyst expectations as lower iron ore prices and subdued global demand weighed on results.
Vale posted a net profit of $1.39 billion for the three months ended March 31, down from $1.67 billion a year earlier and below the $1.68 billion expected by analysts polled by LSEG.
Net operating revenues slipped 4% to $8.1 billion, while adjusted EBITDA fell 9% to $3.1 billion.
The company, one of the world’s largest iron ore producers, cited falling iron ore prices as the main driver of the decline. Iron ore accounted for 84% of Vale’s EBITDA, with segment earnings dropping 17% year-on-year due to a 16% fall in benchmark fines prices, which offset the benefit of lower unit costs and a 4% increase in volumes sold.
Vale’s all-in iron ore costs dropped from $70 per ton in Q1 2024 to $64 per ton in Q1 2025, with C1 cash costs from own production down 11% to $21 per ton.
Base metals, meanwhile, saw improved performance, with EBITDA more than doubling to $554 million as revenue increased by 22% and costs fell.
Free cash flow plunged 77% to $504 million, while net debt rose to $12.2 billion, up from $10.5 billion a year earlier, reflecting capital returns and a working capital build.
Vale is a key supplier to China, where industrial growth has been uneven in early 2025, adding to volatility in global commodity markets. The company’s results highlight broader pressures facing miners as metal prices fluctuate and demand remains uncertain.
Looking ahead, analysts at Jefferies expect iron ore prices to remain rangebound between $90 and $110 per tonne and anticipate continued operational improvements in base metals. The company plans to prioritize capital returns, with a sizable share buyback likely in 2026 if current valuations persist, according to Jefferies.