The price of the Brazilian high-grade iron ore, 65 percent iron contents, is now $109/mt against $111/mt on April 25, CFR China.
During a conference with analysts, Gustavo Pimenta, CEO of Vale, stated that the prevailing iron ore prices accurately reflect the global supply and demand balance.
He stated if prices drop by $10/mt, many producers will exit the market due to high production costs.
The price is negatively affected by US-China trade uncertainties and rumors of possible steel production cuts by Chinese authorities, reducing iron ore demand.
The export price of blast furnace grade pellets is now $122/mt against $124/mt previously, CFR China, reflecting the same premium ascribed to the product in relation to the equivalent sinter feed fines.
The premium of the Brazilian high-grade ore, in relation to the Australian 62 percent iron ore, when considering their iron units, is now 6.8 percent, against 7.0 percent previously, reflecting the interest, at such price level, by the integrated steel producers for the higher productivity and lower emissions of the premium ores when processed in blast furnaces.
In the Brazilian domestic market, the reference prices are now $87/mt for the ore and $100/mt for the pellets against respectively $86/mt and $99/mt previously, ex-works, no taxes included.
Such prices were positively affected by lower Brazil-China freight rate, as the domestic prices in Brazil are based on FOB prices, having the CFR China quotation as the reference.