【Ferro-alloys.com】: Brazilian miner Vale on Wednesday lowered its forecast for iron ore agglomerates production in 2025, as the pellet market struggles with oversupply concerns and reduced demand for high-quality products.

The company cut its output outlook to between 31-million and 35-million metric tons, down from a previous range of 38-million to 42-million tons, saying in a securities filing that the decision reflected "current market conditions."

Analysts said the move came as no surprise, as pellet prices have been under pressure and executives at the miner have emphasized that its portfolio is flexible and competitive, enabling it to adapt to shifting market dynamics.

Iron ore agglomerates, which include both pellets and briquettes, are high-grade products central to Vale's low-carbon strategy.

"Vale's decision aligns with the subdued market environment. Producers are increasingly cautious, with some diverting to fines sales," said Wood Mackenzie analyst Artur Bontempo.

He noted that compressed steel margins have pushed mills to favour cheaper, lower-grade ore over high-cost pellets.

Market conditions this year were also pressured by Samarco's growing output. The joint venture between Vale and BHP is set to add eight-million tons of pellets and pellet feed to the market as it ramps up production.

According to Vale, the revised 2025 outlook came as it decided to bring forward preventive maintenance at its Sao Luis pelletizing plant in the third quarter, suspending production during the period.

Analysts at RBC Europe said that, at the mid-point, Vale's new guidance would reduce seaborne pellet supply by seven-million tons, representing 6% of the total market.

The move could benefit Australian rival Rio Tinto, they added, as it should help improve premiums going forward.

Sao Paulo-traded shares of Vale were up 4% on Wednesday, buoyed by higher iron ore prices.

• [Editor:Alakay]