The reduced premium for lumps and pellets, coupled with a surge in ocean freight rates and roughly stable iron ore prices in the Chinese export market, have resulted in lower prices for Brazilian domestic iron ore prices. Prices are currently estimated at the equivalent to $75/mt for sinter feed fines of 65 percent iron contents, $83/mt for equivalent lumps and $89/mt for equivalent blast furnace grade pellets, ex-works, no taxes included, wet basis. This compares respectively with $89/mt, $102/mt and $108/mt, earlier this week.
However, news from Vale this week indicates that pellet production at the company’s Tubarao complex was not affected by the closure of the company’s Itabira mines from June 5-17. The Itabira mines produce the pellet feed fines to feed Vale’s pellet plants at Tubarao and Oman, and also produce low grade fines to blend with high grade ores from Vale’s northern system to produce the Brazilian Blend (BRBF), iron ore fines with an average 63 percent iron contents, typically intended for export to China and Malaysia.