Vale’s iron ore and pellet shipments in the Middle East declined -20% on-year in the second quarter to 2.23 million tonnes. This comprised 2.6% of the Brazilian miner’s consolidated sales versus 3.3% in Q2 2015. Nevertheless, compared to Q1 deliveries surged 31%.

Operating revenue generated in the Middle East fell -16% on-year in Q2 to $240 million, comprising 3.6% of consolidated revenue compared to 4.1% a year earlier. Q2 revenue did, however, surge 58% from Q1 due likely to the increased shipments and higher international iron ore prices.

Vale’s Oman-based iron ore pelletising plant posted a -24% on-year decline in Q2 production to 1.85mt (see Kallanish 22 July). One of the Oman plant’s two pelletising modules was shut down for maintenance in May and June.

Vale’s regional direct reduced iron-based steelmaker customers include Sabic, Emirates Steel, Qatar Steel and Watani Steel. Its location of Sohar is also home to DRI-based 2m t/y billet producer Jindal Shadeed, as well as steelmaker Sohar Steel and re-roller Al Jazeera Steel.

Middle Eastern DRI producers have been hit by a DR-grade pellet shortage resulting from Samarco’s stoppage following last November’s dam burst. Suppliers such as Vale, LKAB and IOC are seen stepping in to partially fill the gap. Moreover, more scrap is seen being used as an alternative to DRI.