Brazil – the world’s second-largest iron ore exporter recorded a rise in its iron ore (including pellets) export volumes in Q1 CY’21. Exports stood at 81.5 mn t in Q1 CY’21 against 69.7 mn t in Q1 CY’20.
On a monthly basis, exports stood at 28.4 mn t in Mar’21, up by 34% against 21.2 mn t in Mar’20, according to trade statistics released by Brazil customs. Also, on a monthly basis, exports picked up by 18% as compared with 24.1 mn t in Feb’21.
Exports have picked up for the month on rising environmental curbs in China. The local authorities had announced plans to impose production controls on 23 steelmakers from March 20 to Mar 31 in a bid to lower emissions by 30%-50%. The mills procurement preference had turned towards higher-grade materials over low grade, given the constraints on capacity utilization and strong steel margins.
On 13 Mar’21 SteelMint had reported that Vale has started the commissioning process to ramp up production at Timbopeba mining site, a part of the Mariana Complex, by adding 7 mn t pa to its current capacity. After the commissioning, the mines’ total capacity would reach 12 mn t pa. The commissioning process is expected to last 2 months. The resumption of Timbopeba capacity is another positive step in stabilizing iron ore production and an important milestone on the way to resume 400 mn t pa production capacity by the end of CY ’22.
Later in the month, Vale gradually started operations of the tailings filtration plant located at Vargem Grande Complex, the first of the four plants to be operated in Vale’s sites in Minas Gerais. Further, Vale expects to start operations of the first filtration plant in Itabira Complex this year which will help to reduce water in the tailings. Throughout 2022, the second filtration plant in Itabira Complex and the first filtration plant in the Brucutu site will start operating. The four tailings filtration plants will serve beneficiation plants that have a total capacity to process 64 mn t pa of iron ore.
Brazil iron ore export prices picked up in Mar’21:
The average price of iron ore exported from Brazil in Mar’21 witnessed a rise on a monthly basis to $126.6/t, FoB Brazil as against $119.8 in Feb’21. On a yearly basis, the average price of iron ore increased significantly as compared to Mar’20 price at $64.2/t, FoB Brazil.
Outlook– Stricter production curbs in China’s Tangshan region dampened buying interest. Recently, four more mills were downgraded in terms of their emission category. These four Tangshan steel mills have been downgraded to grade D, which means they might need to cut 50% emissions when the next round of emergency response comes. Rising emission standards may accelerate high-grade ore requirements in the near term.
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