Brazil’s exports of iron ore down 16.7% in June

Brazil’s iron ore exports totaled 29.40m tons in June, a strong 16.7% yearly decline and slightly down from the 29.83m tons shipped in May. The data were released by the Secretariat of Foreign Trade (Secex) last Monday (07/01).

Brazilian shipments of the commodity have fallen on the yearly comparison since March, amid disruptions from the collapse of the mining dam in Brumadinho (MG) in January, which left hundreds dead and raised concerns about mining operations in the country.

In April, Brazil’s iron ore exports reached a monthly low for 2019, with a volume of 18.34m tons, 29% lower than the same month of the previous year.

Concerns over a tight iron ore supply following the Brumadinho disaster and Australian mining companies’ operating problems have boosted the price of iron ore this year.

Steel’s raw material closed at a high 4.7% on the Chinese stock market in Dalian on September 1, at 873 yuan per ton. Iron ore rose to 874.5 yuan at the session, the highest value registered since trading began in the stock market in 2013.

Prices should decrease with Chinese production

Despite this scenario, Reuters says current iron ore prices are expected to decrease as China’s output is peaking this year. The price should decrease gradually.

According to the Australian government’s commodity forecasting department in its latest quarterly report released Monday (07/01), China will produce 940m tons of steel in 2019, up from 928m last year.

The report also estimates that global steel production will be practically stable over the next few years, with 1.805bn tons expected for this year, 1.806bn tons in 2020, and 1.808bn tons in 2021.

The small decline in Chinese output will be offset by increased output in India, with 114m tons forecast for this year, rising to 130m by 2021.

Another forecast is that the global maritime trade in iron ore is expected to fall 4% in 2019 to 1.53bn tons, according to the report, as the Brazilian shutdowns due to the rupture of the Vale Dam in Brumadinho and climatic Australia have their impact.

Source: Reuters

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