Brazilian miner Vale produced record amounts of iron ore, nickel, copper, cobalt and gold as it battled a slump in global metals prices by boosting output in search of greater market share. Results, though, were below what some analysts expected even as they helped Vale, the world's third-largest mining company, meet some of its own output targets.

Fourth-quarter iron ore production rose 2.4% year on year to 88.4-million tonnes, its largest ever fourth-quarter total, the company said on Thursday. Output was down 3% compared with the third quarter. Vale preferred shares, the company's most-traded class of stock fell 2.9% in afternoon trading on Thursday in Sao Paulo to 8.34 reais, its first decline in five days.

"Production fell short of both our estimate and consensus and surprisingly was down 3% on a sequential basis," said Garrett Nelson and Jason Nguyen, metals and mining analysts with BB&T Capital Markets in Richmond, Virginia in a note to clients. As a result, Nelson and Nguyen cut their fourth-quarter outlook for Vale earnings before interest, taxes, depreciation and amortisation, or EBITDA, a measure of cash flow from operations, by 3.5% to $1.39-billion. Vale releases fourth-quarter and full-year financial results on February 25.

The result pushed full-year 2015 output to 345.9-million tonnes, another record, helping to maintain Vale's place as the world's largest producer of the steelmaking ingredient. It did though beat Vale's target of 340-million tonnes for the year. Along with Australian rivals BHP Billiton and Rio Tinto, Vale has moved to ramp up output of iron-ore in the face of a 28% drop in prices in the past year and 75% over five years. Vale and its rivals are betting on their lower costs and higher volumes pushing out smaller rivals and stabilising prices even as demand slows in China, the world's largest steelmaker and iron-ore buyer.

Quarterly output was also below expectations of Citibank analysts Alexander Hacking and Thiago Ojea. Fourth-quarter output excluding Vale purchases from third parties was 85-million tonnes, 5% below the Citi analysts' estimate. The lower-than-expected result was caused by "greater than expected losses stemming from the Samarco dam tragedy and previously announced shutdowns of higher-cost mines," they said. Samarco, a 50/50 joint venture between Vale and BHP Billiton, suffered a deadly iron-ore tailings dam breach in November that damaged Vale mine systems nearby and led to a Samarco shutdown. Samarco output was not included in Vale results.

Record output is far less important to Vale's future than low iron ore prices, said Leonardo Correa, mining analyst at BTG Pactual in Sao Paulo. A 23% gain in the spot iron-ore price since December seems unlikely to last, he added. "Iron-ore seems toppish to us with a clear disconnect between pricing and fundamentals," Correa wrote in a note to clients. "We struggle to see how iron-ore will sustain recent gains." He expects iron ore output to remain stable in 2016 and finish the year at between 340-million and 350-million tonnes. Rio de Janeiro-based Vale, the second-largest nickel producer, said that production of the metal used to make steel rust resistant rose 12.3% to 82 700 t in the quarter. Annual output was 291 million tonnes, up 15.4% on 2014.

Coal output fell by nearly a third in the quarter to 1.59-million tonnes. Output in 2015 was down 23% at 7.34-million tonnes. Copper production, meanwhile, rose 6.7% in the quarter to 112 500 t, boosting annual output by 13.4% to 423 800 t. Gold output in the fourth quarter rose 26% to 117 000 oz and cobalt production was up 0.4% at 1.27-million tonnes.

• [Editor:Juan]