Brazilian iron ore exports fell further in October as total volumes continued to retreat from August's record high.
Exports fell to 33.8mn t in October from 35.7mn t in September as volumes climbed down from the August peak — which was the highest since Global Trade Tracker data began in 2002. But volumes remained much higher year on year, up from 26.7mn t in October 2022, according to development, industry, trade and services ministry data.
A key factor behind the fall in exports is the machinery failure that occurred at Vale's main iron ore mine S11D in August, which has resulted in a decrease in production in the Northern System and fewer cargoes available for export.
"Northern System production decreased by 1.5mn t year on year [in the third quarter] owing to a one-time failure in the conveyor belt system at S11D in August, with an impact of approximately 2mn t," Vale said.
As a result, Vale's overall iron ore production fell in the third quarter of 2023 to 86.2mn t from 89.7mn t in the same period in 2022, according to the company, which has limited the number of cargoes available for export.
For now, the flow is recovering as "S11D operations are currently running as usual", Vale told Argus.
But Vale's chartering activity was slow for the November loading window and it has now wrapped all its requirement as it is looking for a Newcastlemax ship loading on 2-10 December, according to shipbrokers.
Brazil's overall exports totalled 309.2mn t in January-October, 9.5pc higher year on year, ministry data show. But exports are projected to fall soon seasonally because of the rainy season — likely to be in the first quarter of 2024.
The lower October exports have encouraged competition between shipowners for the fewer available cargoes, which drove Capesize rates down through the month as well. Freight rates from Tubarao to Qingdao in China fell from a peak on 17 October of $27.50/t to $20.30/t by the end of the month.
