Brazil, the world’s second-largest iron ore exporter, recorded a 7% y-o-y fall in its iron ore and pellets export volumes in Jul’21. The volumes stood at 31.7 million tonnes (mn t) in the month under consideration as against 34 mn t in Jul’20, according to trade statistics released by Brazil customs.
On a monthly basis, exports decreased by 6% compared to 33.68 mn t in Jun’21.
According to data published by the country’s economy ministry, exports dropped on lower overall shipments and less number of working days in the month. There were 22 working days in Jul’21 compared to 23 in 2020, making the contraction more severe.
Also, iron ore imports from China are expected to see a drop in the coming months due to the rainy season and weakening steel margins coupled with possible steel output curbs in H2CY’21.
Iron ore export prices pick up in Jul’21: As per data published by the ministry, prices of iron ore reached an all-time high this year. The average price of iron ore exported from Brazil in Jul’21 rose to $158.8/tonne (t), FoB Brazil on a monthly basis as against $153.6/t in Jun’21. On a yearly basis, the average price of iron ore increased significantly as compared to the Jul’20 price of $70.5/t, FoB Brazil.
Vale SA, the second-largest iron ore producer in the world at present, revised down its guidance for end-2021 production capacity to 343 mn t/annum from 350 mn t announced previously. During a call with analysts on 29 Jul’21, the company declared that the issues that are hindering production are licensing problems at the Sistema Norte and Mutuca assets in Brazil as well as temporary restrictions on the disposal of mining waste at the Itabira mine. However, the miner has kept its 2021 production guidance of 315-335 mn t unchanged.
The miner recorded total iron ore fines production at 75.7 mn t in Q2CY’21, up 11% as against 68 mn t in Q1CY’21. Production picked up due to several reasons. These include higher volumes from its Brucutu mine coupled with the increase in high-silica sinter feed production, improvement in weather-related conditions in Serra Norte, a strong performance from the Serra Leste mine, higher productivity from the Itabira Complex and wet processing production at the Fabrica mine.
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