11-11-2022 Brazil Iron Ore Exports, Howe Robinson
Brazil’s iron ore exports suffered a record month on month decline in October; after a strong September (36 MMT) shipment programme exports plummeted by 9.3 MMT to 26.8 MMT. Cargo destined for China dropped 7.3 MMT month on month providing further evidence of slackening demand in the world’s largest consumer of iron ore whilst the 7.9 MMT shipped to the rest of the world was Brazil’s lowest monthly total since February (when heavy rains caused significant logistical disruption) and compares to a much stronger 9.2 MMT in October 2021.
In the first ten months of 2022 Brazil’s iron ore exports at 282 MMT are down 15 MMT (-5% y-o-y) on the equivalent period in 2021. Shipments to China at 192 MMT have contracted by 8 MMT y-o-y whilst cargo shipped to Vale’s Teluk Rubiah hub in Malaysia at 16 MMT have decreased 3 MMT(-16% y-o-y). Exports to Brazil’s other main customers in the Far East are largely static with Japan at 10 MMT and South Korea at 6.4 MMT, whilst in the Middle East cargo shipped to Vale’s pellet plant in Oman have marginally increased at 8.4 MMT though this is more than counterbalanced by a fall of nearly 1 MMT to Bahrain at 9.7 MMT. Exports from Brazil to Europe are all reduced with Netherlands at 6.3 MMT, France 3.4 MMT, and Italy 2.5 MMT all down about 5% y-o-y though there is a much sharper contraction to Belgium (minus 18% y-o-y) at 1.8 MMT, Germany down 0.9 MMT (-32% y-o-y) at 1.9 MMT whilst shipments to Spain nearly halved at 1.2 MMT.
Slack demand is reflected in the iron ore price which for November has ranged between $80-90 CFR for 62FE in comparison to $115-120 this time last year with prices peaking around $220 as recently as July 2021. Brazil’s mining companies are also facing a further potential setback as the new government of Lula da Silva is considering imposing tariffs on all iron ore production.