Dry Bulk Market Benefiting From Higher Brazilian Iron Ore Exports

Brazil’s iron ore exports grew by 7.9% in 2023, favoring higher ton-mile demand for dry bulk carriers. In its latest weekly report, shipbroker Banchero Costa discussed the global iron ore trade and Brazil’s exports in particular. According to the report, “2023 was a very positive year for global iron ore trade. In Jan-Dec 2023, global loadings of iron ore increased by +5.1% y-o-y to 1,631.9 mln tonnes, from 1,552.2 in the same period of 2022, based on AXS Marine vessel tracking data. It is also just above the 1,594.3 mln tonnes loaded in Jan-Dec 2021, which was the last all-time record. Exports from Australia increased by +0.9% y-o-y in Jan-Dec 2023 to 915.5 mln tonnes, easily a new alltime record high. From Brazil, exports surged by +7.9% y-o-y in Jan-Dec 2023 to 362.3 mln t. From Canada there was a +6.9% y-oy increase to 58.9 mln tonnes. India also saw an increase of +176.3% y-o-y to 43.4 mln tonnes. From South Africa volumes declined -0.2% y-o-y at 52.5 mln t in 2023”.

According to Banchero Costa, “demand has been poor everywhere except in Mainland China. Iron ore imports into China increased by +5.0% y-o-y in Jan-Dec 2023 to 1,200.8 mln tonnes. Imports into Japan declined by -5.4% y-o-y in Jan-Dec 2023 to 94.9 mln t. Volumes into South Korea were down by -1.8% y-o-y to 70.7 mln t. To Malaysia volumes were also down by -10.5% y-o-y to 20.5 mln t. Imports into the European Union declined sharply by -9.3% y-o-y in Jan-Dec 2023 to 71.6 mln tonnes, the lowest since 2020. To Bahrain, volumes were up +7.5% y-o-y to 14.1 mln t, but to Oman imports declined by -6.0% y-o-y to 12.3 mln t. To Saudi Arabia imports increased +4.2% y-o-y to 9.2 mln t”.

“Brazil is currently the second largest exporter of iron ore in the world, after Australia. In 2022, Brazil accounted for 22.2% of global iron ore shipments, after Australia’s 56.1%. Canada is third with just a tiny 3.6% share, whilst South Africa is fourth with 3.2%. In 2021, Brazil exported 345.7 mln tonnes of iron ore, which was a +4.7% increase y-o-y, from a low of 330.3 mln tonnes exported in the full year 2020. In 2022, activity softened again due to supply and logistical issues, with exports from Brazil declining by -2.9% y-o-y to 335.7 mln t. In Jan-Dec 2023, iron ore exports from Brazil increased by +7.9% y-o-y to 362.3 mln t. About 50% of exports from Brazil in Jan-Dec 2023 were loaded on VLOCs (including Valemaxes), about 45% was loaded on Capesize tonnage, about 4% on Panamaxes, and 1% on Supramaxes, the shipbroker said.

Banchero Costa added that “looking at major loading ports for iron ore in Brazil, we have: Ponta da Madeira (158.0 mln tonnes in Jan-Dec 2023), Sepetiba/Itaguai (75.1 mln t), Tubarao (65.4 mln t), Guaiba (29.7 mln t), Acu (23.7 mln t), Ponta Ubu (9.1 mln t), Salvador (0.3 mln t), Santana (0.2 mln t). Mainland China is still by far the top destination for Brazilian iron ore, accounting for 70.3% of Brazil’s exports in Jan-Dec 2023. Shipments to Mainland China increased by +8.5% y-o-y to 254.6 mln t in Jan-Dec 2023. This followed a -2.2% decline in Jan-Dec 2022 from 240.0 mln tonnes shipped from Brazil to China in 2021. Volumes to Malaysia (which is mostly for transhipment to other Asian destinations) increased by +4.1% y-o-y in Jan-Dec 2023 to 18.0 mln tonnes from 17.3 mln t in JanDec 2022, but was below the 20.5 mln t in Jan-Dec 2021. To Japan there was a +1.3% y-o-y increase to 11.4 mln t in Jan-Dec 2023, whilst to South Korea volumes declined by -4.0% y-o-y to 7.4 mln t. Exports from Brazil to the EU declined by -17.3% y-o-y to 16.9 mln tonnes in Jan-Dec 2023. This is above the 16.8 mln t in Jan-Dec 2020, but well below the 30.7 mln t in Jan-Dec 2019. Shipments to Bahrain declined in 2023 by -4.6% y-o-y to 10.8 mln t, to Oman by -4.8% y-o-y to 9.8 mln t, whilst those to Turkey increased by +22.8% to 5.2 mln t, and to Egypt by +55.5% y-o-y to 3.1 mln t”, the shipbroker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide