“In the first quarter of 2024, global iron ore shipments rose 3.8% y/y on expectation of strong Chinese steel production which, however, failed to materialise. Iron ore supply has grown faster than Chinese demand which could lead to weaker shipments ahead,” says Filipe Gouveia, Shipping Analyst at BIMCO.
During the start of the year, Brazilian iron ore shipments typically slow down due to mining disruptions caused by heavy rainfall. However, this year conditions were better and Vale, a leading miner, increased output by 6% y/y, boosting shipments from Brazil.
In China, expectations of stronger steel production following the Chinese New Year led to strong iron ore prices. However, despite these expectations, steel production weakened 3.1% y/y while both iron ore shipments and domestic mining rose. Consequently, iron ore inventories in Chinese ports increased and are now at the highest levels since April 2022.
73.9% of the world’s seaborne iron ore shipments are bound for China as the country relies greatly on ore imports to produce steel.
“The capesize segment greatly benefited from this increase in shipments, both due to the higher volume and the above average sailing distances between Brazil and China. This helped the Baltic Exchange’s Capesize 5TC index to…