Vale’s Iron Ore and Steel Exports Continue to Recover After Mining Disaster

Brazilian iron ore exporter Vale has seen a steady recovery in its shipments since a mining disaster earlier in 2019. Panjiva data shows there was a 15.7% sequential increase in June versus May, marking an 86.9% increase from April’s trough. However, that’s still down 25.6% year over year.

Exports to China were actually lower sequentially – potentially after prioritized restocking for Chinese buyers in May – but were down similar amount a similar amount to the total on a year over year basis.

Shipments by other iron ore exporters including CSN dropped in June by 22.0% sequentially, but are still up 111.5% year over year. As a result total exports were 4.3% higher sequentially, but down 12.8% year over year.

Our colleagues in S&P Global Market Intelligence still expect a global deficit in iron ore for the year, as outlined in Panjiva’s research of July 26.


Chart segments Brazilian exports of iron ore by shipper and destination. Source: Panjiva

The drop in iron ore exports may also be result of more being retained for the domestic market and steel production. Brazilian exports of steel products – focused on those targeted for previous U.S. section 232 tariffs – increased by 9.3% year over year globally in 2Q after a 24.1% slump in 1Q.

That’s largely been down to a surge in shipments to the U.S. which rose by 61.5% in 2Q within the confines of quotas defined by an agreement with the U.S. government. Meanwhile shipments to Europe were down 33.7% and those to the rest of the world fell 24.9%.

Chart segments Brazilian exports of steel targeted for U.S. section 232 tariffs destination on a monthly and three-month average basis. Source: Panjiva

Vale’s steel exports have surged 27.9% higher year over year in 2Q after a 47.9% drop in 1Q, suggesting it is indeed retaining iron ore for its own development. Among other major steel producers, there was a 6.3% drop in exports by ArcelorMittal in 2Q, reversing a 31.8% jump in 1Q.

Ternium saw the fastest recovery with a 55.8% surge in 2Q from a 37.2% slump in 1Q. Other exports appear to be in a continued decline with an 11.1% contraction in 2Q after a 42.9% collapse in 1Q, likely due to the shortage of iron ore.

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Chart segments Brazilian exports of selected steel products by shipper on a monthly and three-month average basis. Source: Panjiva

Date of publication: August 2, 2019

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