Boosted by strong global steel demand, coupled with alarming news of a landslide that resulted in one fatality in a Vale mine in the Southeastern state of Minas Gerais, iron ore prices in Brazil have increased in average by $23/mt on a weekly basis, reflecting the increase of prices in the Chinese spot market and achieving price levels last seen in August 2011.
Sinter feed fines of 65 percent iron contents are now traded for export at $190/mt, the equivalent lumps at $198/mt and blast furnace grade pellets at $211/mt, all CFR China conditions, dry basis.
In the Brazilian domestic market, such prices now are $169/mt, $177/mt and $190/mt, respectively, ex-works, dry basis, no taxes included.
Sources mentioned that, although tragic, the accident at the Vale mine will not necessarily affect production levels at Vale, as it occurred during maintenance works in a non-operational facility.
Some analysts believe that the current record high prices are part of an incipient super-cycle of commodities, reflecting a combination of worldwide government monetary stimulus, the availability of efficient vaccines against the Covid-19 pandemic and a strong Chinese demand for commodities to feed the bullish performance of the country’s economy.
Current expectations remain pointing to an increase in December from the 29.15 million mt of combined iron ore and pellets exported from Brazil in November.