Sell iron ore with both hands
The iron ore market is closed for China’s Labour Day holiday but there is a range of material to report upon.
First up, Brazilian exports were soft in April at 25.8mt:
Australian exports were weak as well:
Both are seasonal. In the case of Brazil, rains and a port fire played a role. We should see exports accelerate swiftly by a roughly 40-50mt annualised pace from here.
In Australia, it was probably Cyclone Seroja that is to blame, completing a very weak wet season. From here we can see Australian exports accelerate at a pace of nearly 100mt annualised.
These are big numbers and should weigh heavily on prices henceforth.
Then there is demand. On that front, there are two considerations. The first demand consideration is direct Chinese policy:
- China has removed export tariffs and lifting import tariffs on steel products.
- 33.3mt of steel production is at risk, though it…