Strong Iron Ore Seaborne Trade Propelling Dry Bulk Market Rates Forward
According to the shipbroker, “in terms of tonne-miles, things are even more positive, as trade has massively shifted in favour of long haul shipments from Brazil to Asia. Total iron ore shipments from Australia actually declined by -1.1% y-o-y in the first 7 months of 2021, to 505.9 mln tonnes. On the other hand, total shipments from Brazil surged by +14.0% y-o-y in the same period to 194.5 mln tonnes. Do note however that this is still below the pre- Brumadinho level of 213.6 mln tonnes in the same period of 2018.
Brazil now accounts for 21.8% of global iron ore shipments, after Australia’s 56.7%. South Africa is the third largest exporter after Australia and Brazil, with just a 3.6% market share. South Africa’s seaborne iron ore exports in the 12 months of 2020 declined by -3.2% y-o-y to 54.9 mln tonnes. This was not necessarily due to Covid issues, but actually part of a longer negative trend. Already in 2019, South Africa recorded a decline in exports of -0.5% y-o-y to 56.7 mln tonnes from 57.0 mln tonnes in 2018, which in turn was a -6.5% y-o-y decline from 61.0 mln tonnes in 2017”, Banchero Costa noted.
“However, what Covid restrictions did was to change seasonality patterns quite dramatically. In 1Q 2020, South Africa exported 15.6 mln tonnes of iron ore, which was a positive +3.8% y-o-y increase. In 2Q 2020, Covid-19 hit, and iron ore exports fell to 11.4 mln tonnes, down -20.7% y-o-y. In 3Q 2020, exports from South Africa surged back to 14.6 mln tonnes, which was up +5.3% y-o-y. In 4Q 2020, volumes softened to 13.2 mln tonnes, -1.2% y-o-y. Things remained fairly soft also in 1Q 2021, with South Africa exporting 14.1 mln tonnes of iron ore, which was a -9.6% y-o-y decline from the same period last year. The second quarter of 2021 was even less positive, with 13.5 mln tonnes, which was technically up +17.9% y-o-y from the dismal 2Q 2021, but well below the 14.4 mln tonnes exported in 2Q 2019”, said the shipbroker.
According to Banchero Costa, “overall in the first 7 months of 2021, South Africa exported 32.3 mln tonnes of iron ore, up +2.9% y-o-y In terms of destinations for iron ore exports from South Africa, things shifted a lot. Mainland China is still the top iron ore importer from South Africa, with a 48.7% share. Imports to China from South Africa declined by -23.2% y-o-y to 15.7 mln t in the first 7 months of 2021, from a record 20.5 mln tonnes in the same period of 2020. The second largest destination for South African ore is the European Union, with a 27.9% share. Shipments from South Africa to the EU27 surged by +86.8% y-o-y to 9.0 mln tonnes in the first 7 months of 2021, from 4.8 mln tonnes in the same period of 2020. This was also well above the 7.3 mln tonnes in the same period of 2019. Export to the United Kingdom are up by +50.9% y-o-y to 0.5 mln tonnes, and are essentially back to 2019 levels. Volumes from South Africa to South Korea declined by -21.1% y-o-y to 2.1 mln tonnes so far this year. To Japan they are up +9.9% y-o-y to 1.9 mln tonnes. To Vietnam it’s +71.9% y-o-y to 0.4 mln tonnes”, the shipbroker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide