“We expect the iron ore supply to lift in the second half of the 2021 financial year and demand to moderate, resulting in iron ore prices falling below $US100 per tonne in the fourth quarter.”
“We estimate iron ore shipments from Brazil are up 17 per cent year to date, with Vale up 14 per cent and tracking to deliver above the top end of its guidance for 2021.”
“Over the last few weeks we have seen iron ore inventories at Chinese ports as well as China trader and mill steel inventories lift above the normal seasonal trend.”
“Overall inventories are not yet a concern but it appears the tightness in the market is easing.”
“The outlook for Fortescue is dependent on the outlook for the iron ore price, as well as the urbanisation and income growth in China (its customer).”
“We expect the iron ore price to trade down over the 12 months as the market moves into surplus which will cap share price performance.”
Nothing there I disagree with. Indeed, Brazilian March exports were much higher at 28.4mt. It did have one extra working day but still:
When I see lower prices I go to Rio
It looks to me like Brazil could easily do 350mt this year (barring another virus accident) which would be 60mt higher than 2020. 2022 will see it at all-time records and it keeps growing from there.
There is no iron ore shortage. There are just A LOT of brownfield mines that need to be dusted off and, with prices in the sky, they are returning fast.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
