Brazilian iron ore prices plunge on Chinese currency devaluation

Tuesday, 06 August 2019 22:12:38 (GMT+3)   |   Sao Paulo

Iron ore prices in Brazil have sharply declined by an average of $19/mt from last week, reflecting a steep drop in iron ore prices in the Chinese spot market.

It is the largest weekly decline in recent months, with prices returning to levels of early April 2019. The devaluation of the RMB, rather than supply/demand considerations, is the main driver for the decline, according to local analysts.

Sinter feed fines of 65 percent iron contents are now estimated to be traded for export from Brazil at $76/mt, the equivalent lumps at $100/mt and blast furnace grade pellets at $143/mt, all FOB conditions.

In the Brazilian domestic market, for equivalent ores, the prices are $70/mt for sinter feed fines, $95/mt for lumps and $137/mt for blast furnace grade pellets, ex-works, no taxes included.

In July, Brazil exported 32.41 million mt of iron ore (pellets excluded), against 28.23 million mt in June. The main destinations were Asia (28.35 million mt, of which 23.55 million mt to China), Europe (2.12 million mt), the Middle east (1.47 million mt), and Latin America (470,000 mt).

Exports of pellets have reached 1.85 million mt, against 1.17 million mt in June, destined to Asia (610,000 mt), Africa (510,000 mt), the US (300,000 mt), and Argentina (230,000 mt), while small volumes were shipped to the Netherlands and Trinidad-Tobago.

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