With increased iron ore prices in the Chinese spot market, coupled with stable premium for lumps and pellets and also stable ocean freight rates, the prices for the different iron ore products in Brazil have increased by $3/mt from last week.
Sinter feed fines of 65 percent iron contents are now traded for export from Brazil at $143/mt, the equivalent lumps at $147/mt and the equivalent blast furnace grade pellets at $150/mt, all CFR China conditions, dry basis.
In the Brazilian domestic market those prices are now $118/mt, $122/mt and $125/mt, respectively, dry basis ex-works, no taxes included.
Such price levels are among the highest in recent years, reflecting a combination of two main factors. First is the possibility of including iron ore in the stockpiling program being developed by China, as a precaution against supply disruptions derived from issues such as the Covid-19 pandemic and geopolitical tensions. Second is the uncertainty derived from the impact of the Covid-19 pandemic over Vale’s operations in Northern Brazil.
Meanwhile, the supply/demand balance of the seaborne iron ore market, currently estimated at 1.6 billion mt per year, remains favorable to iron ore producers, as demand growth continues to outpace production.
Preliminary indications from the Brazilian customs are pointing to an increase in September from the 31.33 million mt of combined iron ore and pellets exported by the country in August.