by Chris Becker
Spot iron ore retreated ever so slightly yesterday from its record high but still above $190 per ton while futures settled down from their recent frothy highs, but its sure to be short term:
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With another record trade surplus, exports of iron ore have been booming with over $14 billion launched overseas in March according to the ABS, up nearly $3 billion from February’s figure.
“Iron ore is the foundation of Australia’s export strength, accounting for 39 per cent of all March exports,” ABS head of international statistics Sean Crick said.
A record $14 billion of iron ore was exported in March, up $2.5 billion from February. Iron ore shipments to China rose by $1.3 billion to $10.1 billion in the month.
It will be a bonus for the federal budget in terms of revenue when Treasury had predicted an iron ore price of $US55 per tonne in the mid-year budget review released in December.
Vale reported a pro forma adjusted EBITDA of $8.47 billion, a record for a first quarter, compared with EBITDA of $3.04 billion in Q1 2020, with seasonally lower volumes partially offset by higher prices. Q1 iron ore reference prices rose to $166.90/mt from $89/mt a year earlier. The performance was mainly pushed by the ferrous metals and base metals divisions.
Second quarter EBITDA is likely to rise on continuing increases in both iron ore and copper during April, particularly as Vale has now paid off a major part of expenses related to its fatal 2019 Brumadinho tailings dam accident, executives said on an April 27 call with analysts.