With a 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 in average by $2/mt on weekly basis, partially compensating a $9/mt decline the week before.
Sinter feed fines of 65 percent iron contents are now estimated to be traded for export from Brazil at $90/mt, the equivalent lumps at $111/mt and blast furnace grade pellets at $157/mt, FOB conditions.
In the Brazilian domestic market, for equivalent ores, the prices are $84/mt for sinter feed fines, $105/mt for lumps and $151/mt for blast furnace grade pellets, ex-works, no taxes included.
Most analysts believe that the oscillation of prices derive from uncertainties about Vale’s production potential in the Southeastern state of Minas Gerais. Due to the collapse of the Brumadinho waste dam in January, most of such dams in the state were considered at risk of collapse.
The waste dam of the Gongo Soco mine, which was considered at risk of immediate collapse, experienced a minor landslide last week, which according to geologists has at least postponed the possibility of a catastrophic collapse.
In May, Brazil exported 28.80 million mt of iron ore (pellets excluded), against 17.05 million mt in April. Asia was the main destination (20.79 million mt, of which 15.70 million mt to China), followed by the EU (4.31 million mt), while smaller volumes were shipped to Latin America and Turkey.
Exports of pellets in May reached 983,100 mt, against 1.30 million mt in April. The main destinations were Egypt (323,200 mt), the US (250,300 mt) and Argentina (144,900 mt).