The crisis surrounding China’s Evergrande Group might hit Brazilian iron ore exports, according to a media report by Valor. Evergrande is China’s second biggest property developer.
As Evergrande might default on debt payments, the global stock markets have reacted in a negative way, with shares at companies like Vale and others declining this week. Additionally, the media report noted that the Evergrande debt crisis will further accelerate the ongoing trend of declining iron ore prices, said Sergio Vale, chief economist at MB Associados.
The media report noted that declining iron ore prices are also due to a slower economic growth in China. Another media report by BBC Brazil said a slower real estate market in China also adds to troubles within the Brazilian iron ore export market; iron ore accounts for 20 percent of all Brazilian exports to China, the BBC Brazil media report said. With a slower economic growth in China, Brazil would export less iron ore, both in terms of volume and value.