Brazil's iron ore exports remain on the recovery track, with May shipments totalling 29mn t, up from 18.3mn t in April, economy ministry data show.
But exports were still 16pc below May 2018, following April's 29pc decline on the year. Brazilian iron ore exports started to fall in March after a late-January tailings dam accident at Brazilian company Vale's Feijao dam in Minas Gerais province. The accident led to the closure of some of Vale's iron ore mines in the province, including its second-largest mine Brucutu.
But there are hopes that Brazilian iron ore supplies will receive a boost because the wet processing facility at the 30mn t/yr Brucuti mine has a high probability of reopening in the near term. The mine is currently operating at 10mn t/yr of dry processing capacity and a Brazilian court is hearing Vale's request that it be allowed to restart the wet processing facility.
A significant share of the Brazilian exports are likely to be bound for China, bringing much needed relief to a Chinese market that has been particularly squeezed by the April decline in shipments. Brazilian iron ore shipments to China increased to an average of more than 5mn t/week last month after falling to 2.5mn t/week in early April, according to investment bank Morgan Stanley.
Capesize freight rates in the Atlantic and Pacific have recovered over the past two months, on increased iron ore movements from Brazil and Australia. Capesize rates in both basins had been driven to historical lows by iron ore supply disruptions in Australia and Brazil earlier this year. The Argus assessed Brazil-China Capesize iron ore freight rate has jumped by 41pc to a five-month high of $16.65/t since bottoming out at a 20-month low of $11.70/t on 29 March.
