Brazil’s exports of iron ore in November slipped to 24.7 million tonne very close to the monthly average for the year but substantially down on the 30.2 million tonne of October.
The high volume in October was due to supplementary demand by China. In November that demand from China fell away and was accompanied by a similar slump in requirements by Japan.
The short term volatility in this market remains very difficult to call and its effect is to move the market quite rapidly as in the surge in Cape rates in October contrary to all other sizes.
So far this year Brazil’s exports over 11 months have totaled 279 million tonne consolidating its position as the largest single trade in tonne mile terms and clearly on target to exceed 2008’s record volume of 282 million tonne by a considerable margin. Almost half of Brazil’s exports have been shipped to China with South Korea and Japan mopping up a further 50 million tonne between them.
Reflecting the differing abilities to pull out of recession Brazil’s exports to Europe have increased by a modest 4% to around 61 million tonne welcome in the circumstances but still well below anything seen in the
2002-08 period which averaged 76 million tonne. The conclusion must be that next year countries in the Far East appear likely to pull away further from their European competition and increase the demand for long haul trade.