With upturn, Bahrain invests in Brazil’s iron ore
Bahrain increased imports of Brazilian products by 169% in the first half of 2021. Iron ore had the leading role in the trade growth, accounting for 93% of shipments to the Gulf country. The Arab country’s craving for the Brazilian product can be explained mainly by the race to an economic upturn among countries leading vaccination against COVID-19.
From January to June 2021, the Arab country increased the volume of iron ore imported from Brazil by 87%, totaling 6,088 million tonnes. The trading revenue was USD 863.377 million. A 256% increase compared to the same period in 2020.
For Marcos Henrique, an economist specializing in mining at Lafis Consultancy , there is a whole situation that explains the great moment experienced by the mineral sector in Brazil. The devalued local currency (real) and the product’s high prices heated the iron ore trade. But vaccination contributed to the surge in Bahraini imports.
“In countries like Bahrain, there was a solid lockdown and requirement for proof of vaccination, in addition to it having a small population, less than two million inhabitants. Their vaccination was swift, allowing a return of economic activities, especially in the industry, which is the primary sector for iron ore demand. So, if I were to give a key reason why Bahrain is accelerating its purchases, in that case, it is the same reason China and Saudi Arabia have, which is to be able to boost their economic activity before everyone else,” said Marcos Henrique to ANBA.
According to the World Health Organization (WHO ), until July 13, Bahrain already had almost 70% of its population fully immunized against the new coronavirus.
Price and future
For the economist, the entire Middle East region stands out for its investments in works and infrastructure, and the rebound of demand made the ore price rise.“This movement is reflected in the price of ore, but also oil. Since the end of last year, prices have soared again,” explained the analyst.
The Brazilian Mining Institute (IBRAM) announced this week that while the dollar exchange rate in Brazilian reals rose from BRL 4.92 in the first half of 2020 to BRL 5.38 in the first half of this year, the price of iron ore has more than doubled. The item was the most exported by the mineral sector, and its average price was 101.5% higher than in the same period last year.
The institution also pointed out an increase in mineral production and its prices, bolstering ore sales in the country by 135%.
For the coming months, however, Marcos Henrique recalled that the market should remain more cautious. The concern is with the new variant of the coronavirus, Delta, which could slow down purchases from countries like Bahrain.“Certain places are resuming the use of facemasks and talking about a lockdown again. The commodity, for us, is doing very well. Even if the intensity is lower, the world does not stop buying. We do not have a scenario of total lockdown, which brought down the industry in 2020,” concluded the economist.
Source: Brazil-Arab News Agency (ANBA)