Global production of iron ore products reached 2.2 billion tonnes in 2020 and is expected to reach 2.35 billion tonnes in 2021, according to Fastmarkets.
Despite the covid-19 pandemic, Chinese demand and Brazilian supply constraints have propelled iron ore prices to decade-highs above $175 a tonne this quarter.
Global total exports amounted 1,170 million tonnes in 2020, 9.3% higher than in 2019. Total China imports exceeded 73% of the world total shipped.
As China shut down many small and low-quality iron ore mines and continues to raise its bar on ore quality to match its environmental standards, Brazil, Australia, and India will be major sources of the net increase in production, Fastmarkets reports.
Vale is still looking to return to a capacity of 400 million tonnes, which would see it regain the title of world’s biggest producer that it lost to Rio Tinto in the wake of the Brumadinho dam disaster two years ago, but shipment is still an issue.
Brazilian shipments decreased 8% in February, following heavy rain in the north of the country.
“High rain volumes at major ports will continue to represent a challenge for Brazilian players during 1Q. So far, Brazil is running below guidance,” XP investments said in a note.
