From Goldies yesterday:
…we believe iron ore exports misfired slightly in April in both Australia and Brazil, the world’s largest exporters. In aggregate, we estimate the April shortfall in seaborne supply from these two countries was c.6Mt, roughly equivalent to the monthly supply from South Africa, the 3rd largest exporter. Meanwhile, Chinese steel mills have become comfortable with low inventory levels relative to previous years. This reduces the amount of working capital tied up in stockyards, but it also makes the steel industry more sensitive to supply disruptions. In order to compensate for the unexpected shortfall in spot supply, steel mills had to draw from inventory, while port stocks fell by 10Mt to 86Mt and the spot price rallied. However, a return to normalized export growth in Australia and Brazil is likely to result in a gradual increase in inventory levels and allow prices to resume their downward trend.