Strong maritime trade in iron ore drives dry bulk market rates forward


SStrong demand for iron ore in 2021 has significantly contributed to the rise in freight rates in the dry bulk market. In its latest weekly report, shipping broker Banchero Costa said that “2021 has so far proven to be very robust in terms of the iron ore trade. Total global loadings in the first 7 months of 2021 increased + 2.8% year-on-year to 891.9 million tonnes, according to ship tracking data from Refinitiv. This figure was higher than the 855.6 mln tonnes of the first 7 months of 2019, a year that was affected by the Brumadinho dam disaster. However, this was slightly below the previous all-time record of 892.1 mln tonnes in the first 7 months of 2018 ”.

According to the shipping broker, “In terms of tonne-miles, things are even more positive, as trade has shifted massively in favor of long-haul shipments from Brazil to Asia. Total iron ore shipments from Australia actually declined -1.1% year-on-year in the first 7 months of 2021, to 505.9 mln tonnes. On the other hand, Brazil’s total shipments jumped + 14.0% year-on-year over the same period to reach 194.5 mln tonnes. Note, however, that this remains below the pre-Brumadinho level of 213.6 mln tonnes during the same period of 2018.

Source: banchero costa & c spa

Brazil now accounts for 21.8% of world iron ore shipments, after 56.7% for Australia. South Africa is the third largest exporter after Australia and Brazil, with only 3.6% market share. South Africa’s maritime iron ore exports in the 12 months of 2020 fell -3.2% year-on-year to 54.9 million tonnes. This wasn’t necessarily due to the Covid issues, but was actually part of a longer-term negative trend. Already in 2019, South Africa recorded a drop in exports of -0.5% year-on-year to 56.7 mln tonnes from 57.0 mln tonnes in 2018, which in turn was a decrease of -6.5% year on year compared to 61.0 mln tonnes in 2017, ”noted Banchero Costa.

“However, what the Covid restrictions have done is quite drastically change the patterns of seasonality. In the first quarter of 2020, South Africa exported 15.6 million tonnes of iron ore, which represents a positive increase of + 3.8% year-on-year. In 2Q 2020, Covid-19 struck and iron ore exports fell to 11.4 million tonnes, down -20.7% year-on-year. In Q3 2020, South Africa’s exports jumped to 14.6 million tonnes, an increase of + 5.3% year-on-year. In 4Q 2020, volumes decreased to 13.2 mln tonnes, -1.2% year-on-year. Things also remained fairly sluggish in Q1 2021, with South Africa exporting 14.1 million tonnes of iron ore, which is a -9.6% year-on-year decline from the same period last year. last year. The second quarter of 2021 was even less positive, with 13.5 mln tonnes, which is technically up + 17.9% year-on-year compared to the dismal 2Q 2021, but well below the 14.4 mln of tonnes exported in 2Q 2019, ”said the shipping broker.

Source: banchero costa & c spa

According to Banchero Costa, “Overall in the first 7 months of 2021, South Africa exported 32.3 million tonnes of iron ore, up + 2.9% year-on-year. In terms of destinations for South African iron ore exports, things have changed a lot. Mainland China is still South Africa’s largest importer of iron ore, with a share of 48.7%. Imports to China from South Africa fell -23.2% yoy to 15.7 mln t in the first 7 months of 2021, from a record 20.5 mln tonnes during from the same period of 2020. The second destination for South African ore is the European Union, with a share of 27.9%. South Africa’s shipments to the EU27 jumped + 86.8% year-on-year to 9.0 mln tonnes in the first 7 months of 2021, compared with 4.8 mln tonnes in the previous year. same period of 2020. This was also well above the 7.3 mln tonnes in the same period of 2019. Exports to UK are up + 50.9% year-on-year to 0.5 mln tonnes, and mostly back to 2019 levels. South Africa to South Korea volumes declined -21.1% year-on-year to 2.1 mln tonnes so far this year. In Japan, they are up + 9.9% year-on-year to 1.9 mln tonnes. For Vietnam, it is + 71.9% year-on-year to 0.4 mln tonnes, ”concluded the shipping broker.
Nikos Roussanoglou, Hellenic Shipping News Worldwide


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