Brazil's Vale signals slight drop in iron ore production

(Adds iron ore price performance, nickel production and 2017 guidance)

By Stephen Eisenhammer

BRASILIA, April 20 (Reuters) - Brazilian miner Vale said on Wednesday it expects full-year iron ore production to come in at the lower end of guidance, as the world's largest iron ore producer joined Australian rivals in signaling a halt to years of ramping up output.

Vale SA said it produced 77.5 million tonnes of iron ore in the first quarter, just hitting a company record for the period but down 12 percent from the final quarter of 2015.

"Production in the first quarter and the plan for the rest of the year suggests an annual production towards the lower end of our original guidance of 340-350 million tonnes," the company said in a statement. The company produced 345.9 million tonnes in 2015.

By next year Vale's production will be growing again as its new S11D mine comes onstream, with the company targeting between 380 and 400 million tonnes. But its indication of lower production in 2016, coming on the heels of output cuts by BHP Billiton and Rio Tinto (LSE: RIO.L - news) , could help insulate a rally in the iron ore price which has jumped 50 percent since January.

Earlier on Wednesday BHP cut its 12-month iron ore production through June by 10 million tonnes to 260 million tonnes, just a day after Rio reduced 2017 production guidance by between 10 million and 20 million tonnes.

Vale said output at its mines in the northern state of Para compensated, the miner said, for stalled production in the southeast due to the collapse of a tailings dam at a mine run by Samarco, a joint venture between Vale and BHP.

On top of iron ore, Brazil's largest miner produced 73,500 tonnes of nickel, an increase of 6.2 percent compared to the same period last year. Coal production was 1.66 million tonnes, down 1.9 percent from the first quarter of 2015.

(Reporting by Stephen Eisenhammer, editing by G Crosse and David Gregorio)