Spot Iron Ore Prices Pick Up on Falling Exports from Brazil

Chinese spot iron ore prices increased to USD 121.3/MT, CFR China, as on 1st July'19. The prices picked up as against USD 117.95/MT, CFR China towards last weekend. The drop in Brazil's exports of raw material raised supply concerns amid constraint availability of material from Vale. As per data released by Brazilian Govt, the country's total export of iron ore stood at 29.40 MnT in June'19 (data complied till 19th June'19), down as against 29.83 MnT in May'19. Exports dropped significantly on yearly basis as against 35.29 MnT in Apr'18.

Global supply crises of iron ore continued as Australian major miner, Rio Tinto on 19th June'19 announced drop in its iron ore Pilbara shipments guidance due to mine operational challenges at the company's Greater Brockman hub. Rio Tinto 2019 Pilbara iron ore shipment guidance is reduced to 320-330 MnT as against 333-343 MnT previously.

Vale has kept the sales guidance intact at 307 MnT- 332 MnT and informs that its current sales volume will be observed towards midpoint of the range.

As per data compiled by SteelHome consultancy, Iron ore inventory at major Chinese ports dropped to 115.25 MnT as compared to 116.75 MnT a week ago. The inventory has fallen to lowest levels since around 2017 amid reduced supply from major miners Brazil & Australia and increased demand from Chinese mills

Dalian iron ore future rebounds

Dalian iron ore future for Sep'19 climbed 4.6% to 894.5 yuan/MT on 1st July, the highest since inception in 2013 as against 789 yuan/MT a week ago.