Iron ore prices have increased over the week in the Chinese spot market, but ocean freight rates have also increased, absorbing part of the gains in FOB terms, resulting in Brazilian sinter feed fines increasing by $3/mt on a weekly basis.
The premium for lumps was reduced so prices of the product remained stable, while the premium for pellets has increased, the latter reflecting the stoppages of two pellet plants in the southeastern state of Minas Gerais as an indirect consequence of the tragic collapse of the Brumadinho waste dam in January.
Sinter feed fines of 65 percent iron contents are now estimated to be traded for export from Brazil at $97/mt, the equivalent lumps at $118/mt and blast furnace grade pellets at $164/mt, FOB conditions.
In the Brazilian domestic market, for equivalent ores, the prices are $91/mt for sinter feed fines, $112/mt for lumps and $158/mt for blast furnace grade pellets, ex-works, no taxes included.
The uncertainties regarding the return to operations of Vale’s Brucutu mine, also idled as indirect consequence of the tragic collapse of the Brumadinho, remain as a positive pressure on prices due to the low availability of higher-grade ores.
Another Vale waste dam, in the Gongo Soco mine in Minas Gerais state, is also in danger of an immediate collapse based on recent geological measures, putting additional pressure on iron ore prices, according to local analysts.
Preliminary indications from the local customs authorities point to a two-digit increase in May from the 18.35 million mt of combined iron ore and pellets exported from Brazil in April.