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Seaborne Iron Ore Trade Down In First Four Months of 2022, as China’s Demand Retreats

Seaborne iron ore trade has retreated by 2% so far in the first four months of 2022, as Chinese demand hasn’t been as strong. In a recent weekly report, shipbroker Banchero Costa noted that “global iron ore loadings in the full 12 months of 2021 were up +0.7% y-o-y to 1,555.3 mln t, according to vessels tracking data from Refinitiv. This was marginally higher than the 1,526.0 mln tonnes in the 12 months of 2019, a year which was affected by the Brumadinho dam disaster. It was however still slightly below the all time record 1,557.3 mln tonnes in the 12 months of 2018. Total iron ore shipments from Australia declined by -0.3% y-o-y in Jan-Dec 2021, to 883.8 mln t. On the other hand, total shipments from Brazil surged by +3.8% y-o-y in Jan-Dec 2021 to 346.9 mln t”.

According to the shipbroker, “so far in 2022, iron ore trade softened again, primarily due to weaker demand from China. In Jan-Apr 2022, global iron ore loadings declined by -2.0% y-o-y to 477.5 mln tonnes, from 487.2 mln tonnes in the same period of 2021. Exports from Australia increased by +0.6% y-o-y in Jan-Apr 2022 to 281.1 mln tonnes, an all time record for this time of the year. Exports from Brazil, on the other hand, declined by -6.6% y-o-y so far this year to 96.7 mln tonnes, from 103.5 mln tonnes in the same period last year, although they were still higher than in both 2019 and 2020. Brazil now accounts for 20.3% of global iron ore shipments, after Australia’s 58.9%”.

Source: banchero costa &c s.p.a

Banchero Costa noted that “the European Union (27) is currently the third largest importer of iron ore in the world, after China and Japan. Europe’s steel industry has long been overshadowed by China and the rest of Asia, and presently Europe accounts for just 8% of global crude steel production, and 6% of global iron ore imports. Crude steel production in the whole of Europe including the UK climbed +14.1% y-o-y to 203.7 mln tonnes in 2021, with Germany, the largest European steel producer, producing 40.1 mln tonnes, up +12.3% y-o-y. Whilst last year’s production increases resulted from a rebound from Covid lockdowns in 2020, things still look challenging this year due to significant increases in energy costs, denting mills’ profitability”.

The shipbroker added that “in the 12 months of 2021, the European Union imported 78.5 mln tonnes of iron ore, which was a +10.4% increase y-o-y, from a low of 71.1 mln tonnes in 2020. This was however significantly below the 93.9 mln t imported by the EU in 2019, or the 97.6 mln t in 2018. In the first 4 months of 2022, activity continued to rebound, with iron ore imports increasing further by +7.7% y-o-y to 28.4 mln tonnes, from 26.4 mln t in Jan-Apr 2021. This was almost at par with preCovid levels of 29.0 mln t in Jan-Apr 2019 and 30.9 mln t in Jan-Apr 2018. In terms of individual countries, 35.6% of imports in Jan-Apr 2022 were done by the Netherlands (largely due to the importance of Rotterdam as a gateway port). German ports accounted for 15.5% of imports in Jan-Apr 2022, followed by France with 14.4%, Spain with 8.8%, Italy with 8.5%, Belgium with 4.9%, Poland with 3.2%.

Source: banchero costa &c s.p.a

When it comes to the sources of the shipments, the main one remains Brazil, albeit with lower volumes. Brazil was still the top supplier of iron ore to the European Union in Jan-Apr 2022, accounting for 25.6% of the EU’s total imports. However, shipments from Brazil to the EU declined by -11.1% y-o-y in Jan-Apr 2022 to just 7.3 mln tonnes, from 8.2 mln t in Jan-Apr 2021. Shipments from Canada to the EU in Jan-Apr 2022 were perfectly flat +0% y-o-y at 5.6 mln tonnes. Canada accounted for 19.7% of the EU’s ore imports in Jan-Apr 2022. Shipments from South Africa also declined by -6.6% y-o-y in Jan-Apr 2022 to 4.9 mln tonnes. Exports from Norway are up +11.4% y-o-y to 3.6 mln t in Jan-Apr 2022. Volumes from Mauritania increased by +49.5% y-o-y to 1.4 mln tonnes. Shipments from India surged by +1000% to 1.1 mln tonnes, from just 0.1 mln tonnes last year”, Banchero Costa concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide

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