Dry Bulk Market’s Ton-Mile King: Brazil Iron Ore Exports Every Owner’s “Dream”
“In terms of exporters, Australia was still the king in 2020, accounting for 57.3% of global iron ore shipments. In the 12 months of 2020, Australia exported 886.4 mln tonnes of iron ore, which was a +3.3% increase year-on-year. Brazil, the world’s second largest exporter, continued to struggle in 2020, with exports declining by -2.0% y-o-y to 334.0 mln tonnes. It should be noted that 2019 itself was a very poor year for Brazil, and 2020’s total exports were a whole -13.7% less than the 386.9 mln tonnes exported in 2018. However, if we look more closely at the data, the worst was in the first half of the year, and things turned around sharply, especially in the final quarter. Further, the start of 2021 has been fairly positive as well, relatively speaking. In the first 3 months of 2020, Brazil exported 65.0 mln tonnes of iron ore, down -17.2% y-o-y”.
According to Banchero Costa, “the first quarter is traditionally the quietest period of the year, as it’s affected by the Lunar New Year holidays in China, as well as weather disruptions from the raining season in Brazil. The second quarter of 2020 saw shipments of 77.9 mln tonnes from Brazil, which was technically up +1.2% y-o-y compared to a (very poor) equivalent quarter in 2019, but down -17.1% when compared to the second quarter of 2018. In the third quarter, exports increased to 97.3 mln tonnes, which was again +1.9% y-o-y from the same quarter in 2019, but -7.9% down from the 3Q 2018”.
The shipbroker added that “tThe fourth quarter of 2020 saw exports correcting slightly to 93.8 mln tonnes, up +4.5% compared to the fourth quarter in 2019, but again down -9.0% if compared to the same quarter of 2018. When it comes to exports from Brazil in the first quarter of 2021, it is pretty much the same story. In terms of year-on-year comparisons, the 77.9 mln tonnes exported in 1Q 2021 seem very positive, a healthy +19.9 y-o-y increase on 1Q 2020. But again, this is only because early 2020 was a such a low base. In fact, export volumes in 1Q 2021 were still down -0.7% compared to the first quarter of 2019, and down -7.5% from the first quarter of 2018. In terms of destinations of the shipments, things were quite predictable in 2020. Mainland China was still by far the top destination for Brazilian iron ore, accounting for 72% of Brazil’s exports in 2020. Shipments to Mainland China increased by +12.9% y-o-y to 240.5 mln t in 2020. On the other hand, exports from Brazil to European Union (27) declined by -41.1% y-o-y to 18.3 mln tonnes in the 12 months of 2020. Shipments to the GCC countries declined by -20.6% y-o-y to 14.0 mln tonnes. And how is it going in the first quarter of 2021? In 1Q 2021, shipments from Brazil to China surged by +20.4% y-o-y, to 50.0 mln tonnes, an all time record. However, shipments to the EU27 increased by just a modest +0.7% yo-y to 6.4 mln tonnes, and are still down -22.9% compared to the same quarter in 2019. To the GCC it’s +87.4% up from a disastrous 1Q 2020, but still down -1.2% from 1Q 2019”, Banchero Costa concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide