As expected, iron ore prices in the Chinese spot market have increased after the local labor holiday, driving the 65 percent iron sinter feed fines of Brazil to a new record high of $235/mt CFR China conditions.
Still reflecting the rebound of the global economy and fears of undersupply, the new price also reflects diplomatic tensions between China and Australia, which could lead to the reduction of the iron ore volume shipped from Australia.
The price for Brazilian pellets has also achieved a new record price level of $301/mt CFR China, reflecting the demand for products allowing for direct charge in blast furnaces. The pellet prices could increase further if the volume of Australian lumps shipped to China is reduced due to the diplomatic tensions. Lumps are also a direct charge product and the volume exported from Brazil is not relevant when compared to Australia’s.
In April, Brazil exported 24.32 million mt of iron ore (pellets excluded) and 1.47 million mt of pellets, against 26.70 million mt and 1.72 million mt, respectively, in March.
The main destinations for Brazilian iron ore exports were Asia (18.79 million mt, of which 15.77 million mt to China), Europe (2.75 million mt) and the Middle East (2.25 million mt), while smaller volumes were shipped to Mexico, Canada and Argentina.
The main destinations of the pellets were Asia (666,100 mt), the US (292,400 mt), Europe (242,100 mt), Argentina (185,700 mt) and Trinidad and Tobago (81,800 mt).