Brazil: Iron ore exports drop by 4% m-o-m in Sep'24

• Thinning steel margins curb demand
  
  
• Brazilian iron ore prices plunge $6/t
  
  

Brazil's iron ore exports fell 4% m-o-m to 32.51 million tonnes (mnt) in September 2024 compared to 34 mnt in August, as per vessel line-up data maintained with BigMint.

Weak demand for iron ore from China, following high inventories at ports and low margins in finished steel, led to the drop in exports from Brazil.

Exports to China down 2%

Brazil's iron ore exports to the world's largest importer, China, were recorded at 21.06 mnt in September, a 2% m-o-m fall against 21.41 mnt in August amid weak downstream demand.

Malaysia and Japan were the other major importers from Brazil in September, with 2.25 mnt and 1.02 mnt, respectively. While Oman imported 0.70 mnt (a fall of 10% m-o-m), around 0.54 mnt were shipped to the US, a substantial decline of 57% m-o-m.

Port-wise exports

Ponta Da Madeira Port exported 15.67 mnt of iron ore in September, an increase of 3% m-o-m compared to 15.27 mnt in August. Shipments from Tubarao Port were at 6.82 mnt, down 6% m-o-m, while those from Itaguai Port dipped 10% m-o-m to 5.48 mnt.

Price trends

Monthly average Brazilian Fe 62.5% iron ore prices decreased sharply by $6/tonne (t) m-o-m to $96/t CFR China against $102/t a month ago, as end-users kept their focus on discounted lower-grade products due to thin steel mill margins.

Outlook

Iron ore exports from Brazil are expected to increase in the near term, as China's central bank recently announced a reduction in the reserve requirement ratio by 50 basis points, aiming to inject around 1 trillion yuan ($142.20 billion) of long-term liquidity into the market. This move has fuelled optimism about increased demand for iron ore, with active trades concluded in the seaborne market. These actions have improved the outlook for key iron ore-consuming sectors such as construction and infrastructure, especially with policies aimed at stabilising the property market.