With higher prices in the Chinese spot market and reduced ocean freight rates, iron ore prices in Brazil have increased in average by $4/mt from last week, a total of $10/mt increase over the last two weeks, returning to levels last seen in February 2017.
Sinter feed fines of 65 percent iron contents are estimated to be traded for export from Brazil at $81/mt, the equivalent lumps at $105/mt and blast furnace grade pellets at $147/mt, FOB conditions.
In the Brazilian domestic market, for equivalent ores, the prices are $75/mt for sinter feed fines, $99/mt for lumps and $141/mt for blast furnace grade pellets, ex-works, no taxes included.
According to local analysts, iron ore prices in Brazil have moved from an oscillating pattern to an upward trend, following Vale’s recent announcement that it is forecasting a 92.8 million mt production cut of iron ore in 2019, resulting from the disaster at its waste dam in Brumadinho.
In March, Brazil exported 20.22 million mt of iron ore (pellets excluded), against 26.66 million mt in February. Pellet exports in March reached 1.96 million mt, against 2.26 million mt in February.
Although the reduced exports of pellets reflect the stoppage of Vale’s pellet plants in Minas Gerais state, the lower export numbers for iron ore (pellets excluded) does not reflect the problem with the mines in the State of Minas Gerais, as the volume of iron ore produced in the state and exported in March is roughly the same of February.