Brazil's iron ore exports were at their highest for February since 2019, following a late start to the rainy season.
February is typically the weakest month for Brazilian iron ore exports because of the onset of the rainy season. But rainfall was lighter than usual in January-February, enabling firms to produce and export more than in recent years, and to absorb most of the Capesize vessels ballasting westwards from the Pacific. This meant freight rates rose from the fourth quarter.
But rainy season started in earnest in early March, so exports could be constrained this month.
Exports of iron ore rose by 21.5pc on the year to 28.3mn t in February, according to Global Trade Tracker (GTT). Exports fell from 29.3mn t in January, but the drop was smaller than in previous years.
Exports to China rose by 29.2pc year on year to 19.4mn t in February, and exports to Malaysia more than doubled to 2.3mn t from 1.1mn t. No exports loaded for Japan last month, possibly reflecting reduced automobile manufacturing, which totalled 544,264 units in January, down by 6.3pc on the year, mostly because of a suspension in Daihatsu operations.
Brazilian iron ore exports in the first six working days of March hit 8.7mn t and are on track to reach 29.1mn t this month, up from 27.1mn t in March 2023.
Much of the increase in exports was driven by higher output in the fourth quarter of 2023. Brazil's largest producer, Vale, increased output by 10.6pc on the year in the fourth quarter to 89.4mn t. UK-South African mining firm Anglo American increased production from its Minas Rio operation by 15pc to 6.6mn t. CSN produced almost 11mn t, up by 17.5pc. And Usiminas production was steady at 2.3mn t.
The rise in Brazilian iron ore exports pushed up freight rates in January, when charterers were booking February-loading ships. The Brazil-China Capesize rate was volatile over the month, peaking at $29.80/t in early January for February loading and averaging $23.20/t for January. But the market has continued to trend higher and in early March — when charterers were booking April-loading cargoes — the rate hit $31.10/t, the highest on the route since November.
