China and Europe buying lift Brazil iron ore exports

Market: Metals
14/04/21

Brazil's iron ore exports rose by 34pc on the year in March thanks to increased buying from China and Europe.

Last year's first-quarter exports were limited by heavy rains and flooding, and by major producer Vale's slow recovery from a dam accident in 2019, while full-year exports were at a seven-year low largely as a result of Covid-19.

Vale expects to raise its iron ore production capacity by 8.7pc to 350mn t/yr this year, but this would still be a reduction of approximately 10pc compared with 2018.

Brazil's shipments to China rose by 27pc on the year to 17.37mn t in March as a result of China's rapid increase in steel output in the first quarter. On 19 March, the major Chinese steel-producing city of Tangshan ordered 23 mills to reduce production by 30-50pc from 20 March, which weighed on demand for iron ore fines but supported pellet demand.

Brazil exported 3.03mn t to the EU in March, 55pc higher than a year earlier when steelmakers sharply reduced production because of the spread of Covid-19. Brazil's first-quarter exports to Europe found support from lengthening lead times and rising steel prices. The Argus daily northwest Europe hot-rolled coil assessment rose steadily through the first quarter and averaged €788.35/t in March, €311.46/t higher than a year earlier.

Shipments to Malaysia more than tripled on an annual basis to 2.59mn t in March. Vale closed its Teluk Rubiah iron ore blending site from 23 March 2020 to comply with a national lockdown in Malaysia.

Shipments to Japan fell by 51pc to 619,726t. with Japan's steel output at an approximately 50-year low in the April 2020-March 2021 fiscal year, under pressure from weak demand in the vehicle sector and a second state of national emergency over Covid-19.

By Brendan Kjellberg-Motton

Brazil iron ore exports				000t
Destination	Mar	±% yoy	Q1	±% yoy

World	28,418	34	69,771	17
China	17,373	27	44,307	19
Malaysia	2,588	239	5,033	29
Netherlands	1,336	32	3,217	-36
Bahrain	871	-15	2,049	45
Oman	722	n/a	1,163	77
Japan	620	-51	3,057	-30
Argentina	576	124	905	61
Korea	535	-47	2,017	-4
UK	534	n/a	74	1,030
Turkey	417	n/a	894	-13
— GTT

Brazil iron ore exports mn t

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