Reflecting increased iron ore prices in the Chinese spot market, negatively affected in FOB terms by higher ocean freight rates, iron ore prices in Brazil have increased in average by $1/mt week-on-week, following a similar increase the week before.
Sinter feed fines of 65 percent iron contents are now traded for export from Brazil at $63/mt, the equivalent lumps at $84/mt and blast furnace grade pellets at $121/mt, FOB conditions.
In the Brazilian domestic market, for equivalent ores, the prices are $57/mt for sinter feed fines, $78/mt for lumps and $115/mt for blast furnace grade pellets, ex-works, no taxes included.
Although declining since an all-time high of 37 percent achieved four weeks ago, the premium of Brazilian high-grade ore over low grade ore remains at a high level (32 percent).
Such premium, which was not relevant before November 2016, reflects the aims of steel producers to reduce production costs and increase productivity, due to the higher performance of the high-grade ores in blast furnaces.
Preliminary indications from the Brazilian customs authorities point to a reduction, in July, from the 35.3 million mt of combined iron ore and pellets exported from the country in June.