Daily iron ore update (Vale giveth, Vale taketh)

Still no price action during China’s Golden Week holiday. Chinese empty apartment sales are still fine:

But the action is on the supply side. Brazil’s September exports launched to nearly 38mt:

As virus numbers fell:

Though one wonders if a virus rebound is not imminent with the reopening.

Still, the trend in Brazilain supply has been one way since January: up. Now it has reached the highest levels ever for September.

Given some 60mt of capacity remains offline, this is a little baffling. Presumably, it is running down stockpiles so it is not entirely bearish.

Vale also notified that its operations at Viga have resumed but that 34 of its dams again failed safety inspections.

It’s a mess and I’m not convinced that Brazil can continue this level of exports.

Add the seasonal headwinds and I’m still bearish short term but still bullish into new year as well on Chinese restocking. I still see the peak in H1, 2021.

David Llewellyn-Smith
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    • Ukraine fnMEMBER

      In that tweet one of the replies was to ban steel manufacturing!

      What are you going to make your wind turbines out of , paper ?

  1. Tailings storage facilities are very difficult to repair once constructed as the are built incrementally from the bottom up. Once part of it is compromised it’s very difficult to stabilize them for future use; close it and start again is typically easier.

    In Australia you have to demonstrate the final land form will be stable and resist erosion on a geological timescale, thus stuffing them up is really bad news as you don’t want to have the burden of monitoring and managing them for decades after mine closure.

    If Brazil has half these requirements and cash no longer fixes the problem, the issues for Vale may be a long term problem.