With higher iron ore prices over the week in the Chinese spot market, coupled with stable ocean freight rates, neutral on FOB quotations, Brazilian iron ore prices have increased on average by $6/mt on weekly basis, following a $2/mt increase the week before.
Sinter feed fines of 65 percent iron contents are now estimated to be traded for export from Brazil at $96/mt, the equivalent lumps at $117/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.
According to local sources, the $8/mt price increase over two weeks reflects assumptions that Vale’s iron ore production from its mines in the southeastern state of Minas Gerais will remain limited by fears of potential accidents, such as the tragic collapse of the Brumadinho dam in January.
In a recent meeting with analysts, company executives mentioned that the restart of the Brucutu mine will bring soon 20 million mt/year capacity back on stream, while dry processing operations at other idled mines will bring back 20-30 million mt/year to operation in the medium term. As a whole, the directors believe that Vale will restore the 400 million mt/year capacity in a period of two to three years.
In May, Brazil exported 28.80 million mt of iron ore (pellets excluded), against 17.05 million mt in April, while exports of pellets have reached 983,100 mt, against 1.30 million mt in April.