Brazilian iron ore exports down; Indian copper concentrate imports to ramp up

Iron Ore & Steel: Brazilian iron ore exports slowed by rail blockade

• Global seaborne iron ore exports dipped to 27.49 Mt in the week commencing 2 December, the lowest weekly volume in eight months. The decline was mainly attributed to a year-to-date low in Brazilian iron ore shipments, which slumped to 4.84 Mt from 7.57 Mt the previous week and 7.17 Mt a year earlier. This sharp fall was primarily caused by a three-day blockade of Vale’s Carajás Railroad by landless workers in Parauapebas. Kpler data show that 21 iron ore vessels were waiting to be loaded at the port of São Luís, the terminus of the Carajás Railroad, by the end of last week — the highest number in two months.
• In Australia, the risk of disruptions is increasing as labour disputes between Qube and the Maritime Union of Australia (MUA) have prompted planned strikes at key ports, including Dampier and Hedland.
• On the demand side, Chinese seaborne iron ore imports remain firm, reaching 25.15 Mt last week, up 3 Mt y/y and well above the previous five-year average of 22.27 Mt for this period. Counter-seasonal strength in steel production, restocking by mills ahead of the Chinese New Year, and a slight drop in port inventories are all supporting imports. However, the risk of potential declines in steel exports undermining steel production and iron ore demand is rising. Although November steel exports totalled 9.28 Mt — the seventh-highest monthly volume since mid-2016 — this marked a significant drop from October’s 11.18 Mt. Growing trade barriers, including new anti-dumping investigations by Australia, South Africa, and Thailand over the past few weeks, are clouding the outlook for Chinese steel exports.
• Awaiting signals on additional stimulus from the annual Central Economic Work Conference (CEWC), iron ore prices closed little changed w/w on 11 December. The SGX TSI Iron Ore CFR China (62% Fe Fines) benchmark ended at $104.58/t on 11 December, down 0.72% w/w, while the May 2025 iron ore contract, the most liquid on the Dalian Commodity Exchange (DCE), edged up slightly by 1.13% w/w to 802 yuan/t ($110.46/t).

Brazilian iron ore exports from Ponta da Madeira slumped due to blockade (Mt)

Source: Kpler

China’s November steel exports retreated from the October high (Mt)

Source: China Customs

Coal: Chinese thermal coal demand falters, low wind spell to boost coal burn in Germany

• Global thermal coal imports held steady on the week at around 20 Mt, with receipts at key buyers holding firm with the exception of China and South Korea.
• Chinese receipts fell for the third consecutive week, declining by 700,000t w/w to 20.1 Mt, as high coal stockpiles and warm weather conditions reduced the need for coal imports. Temperatures in South China’s Guangzhou were above seasonal norms this month and stocks at the northern ports are growing.

Bohai Rim coal stocks (Mt)

Source: Sxcoal

• In India, imports held steady w/w at around 2.5 Mt, but this is nearly 500,000t lower y/y as strong domestic coal output is reducing import appetite.
• European receipts nearly doubled w/w to 700,000t. The increase was mainly driven by delays in shipments from Colombia owing to rail blockades last months, and the projected increase in coal burn. German coal burn is set to increase in the coming days with the projected drop in wind generation. Coal stocks at the ARA transshipment hub held steady at around 3.5 Mt this week. Coal stocks at Richards Bay Coal Terminal rose to around 4.3 Mt, in line with subdued demand from India.

German thermal vs renewable power generation (GW)

Source: Kpler Power

• In Japan, Chugoku Electric reactivated the 820 MW Shimane 2 reactor after a 13-year hiatus this week. The plant is expected to move to the trial phase in the last week of December. The 825 MW Onagawa No.2 and the 826 MW No.3 Mihama reactors also came back online in November. Kansai Power is planning to take the 1,180MW Ohi No.4 nuclear reactor offline on 14 December for maintenance works. Milder temperatures have weighed down the need for coal burn in Japan and South Korea so far this winter.
• Global seaborne metallurgical coal exports slumped to a 5-week low of 4.99 Mt in the week ending 8 December amid a slowdown in North American and Russian exports. The volume of North American exports is likely to be revised higher once the classification of coal cargoes currently on the water is confirmed. However, the downturn in Russian exports is a reflection of increased logistical headwinds and seasonal constraints on shipping. By contrast, despite reports of mine disruption and supply tightness, Australian exports were higher y/y at 3.15 Mt.
• Softer Indian metallurgical coal imports are weighing on global demand. The months September-November were the three lowest for shipments this calendar year. At 0.81 Mt, imports in the week ending 8 December were a six-week lower and down y/y. An underperforming economy and investment slowdown, combined with competition from abundant Chinese exports, are damaging the profitability of domestic steelmakers. Annual growth in Indian crude steel output was just 1.7% in October, although that was up from a very weak 0.3% in September.

Grains & Oilseeds: USDA ups 2024/25 corn exports, moving closer to Kpler’s estimate

• Argentine wheat production estimates were raised 0.5 Mt this week by the Rosario Grains Exchange to 19.3 Mt due to beneficial rains in Southern growing regions. Northern Hemisphere wheat stocks (see chart) are running at a 3-year low due to lower European supplies and aggressive exports out of Russia. Higher crop totals from the major Southern Hemisphere exporters will help cater to demand in H1 2025. Australian wheat crop estimates are also higher y/y, although rains at harvest have affected quality in Eastern parts of the country.
• US Nov corn exports were the highest in the last four years at 3.9 Mt, up 0.3 Mt y/y. The USDA raised corn exports by 150 mbu to 2475 mbu, moving closer to Kpler’s estimate. Ending stocks were lower as a result. In the absence of Ukraine due to a lower crop, US corn exports are likely to dominate until new-crop Argentine corn flows into the market in Mar-Apr, followed by the prominent Brazilian safrinha crop in June. US corn has not only been competing in traditional destinations in Latin America (Mexico, Colombia) and Eastern Asia (Japan, Korea) but also in Western Europe, which is usually a destination for Ukraine corn. China has been noticeably absent from the line-ups.
• China imported 7 Mt of soybean in Nov, receiving more seaborne soybeans from the US than Brazil for the first time since Mar 2023. Chinese purchases of US soybeans have soared in anticipation of difficulties importing once the new US administration is in place. Despite a slowdown in consumption, China is set to import a record volume of soybeans in 2024 as traders ramp up imports in anticipation of a challenging year ahead.

Northern Hemisphere Dec wheat stocks (Mt)

Source: Kpler Insight

Minor Bulks: Adani’s copper unit in India received its first seaborne copper concentrate imports

• In India, Adani’s copper smelter-refinery subsidiary Kutch Copper Ltd (KCL) in Gujarat state received its first seaborne copper concentrate imports earlier this week. The Handysize vessel, Thomas Selmer, discharged 32,000 tonnes of Chilean Collahuasi copper concentrate at Mundra Port on 10 December. An additional 50,000 tonnes of concentrate from Peru are expected to arrive in January. The unit commenced Phase One operations in March this year and is expected to reach its nameplate capacity of 0.50 Mtpa in the first quarter of 2025. Plans for Phase Two, which will add another 0.50 Mtpa capacity, are set to be implemented by the end of this decade. For the copper unit to ramp up to the full Phase One capacity, India’s annual copper concentrate imports will need to more than double to over 3 Mtpa. India's intention to achieve self-sufficiency in refined copper depends on securing these flows of concentrate.
• Guinea seaborne bauxite exports totalled 2.82 Mt in the week commencing 2 December, down from an eight-month high of 3.53 Mt the previous week but in line with the average levels so far this dry season. In contrast, Australia’s shipments appear to be slowing under the influence of the wet season, with loadings dropping to 0.78 Mt, the second-lowest volume in four months.
• Alumina prices have softened considerably over the past week amid expectations of sustained growth in Guinean bauxite exports during the dry season and a recovery in Australian alumina supply following Rio Tinto’s lifting of force majeure. The most traded February 2025 alumina contract on the Shanghai Futures Exchange (SHFE)closed at 4,648 yuan/t ($640.18/t) on 11 December, down 10.32% from its record high of 5,183 yuan/t ($713.60/t) on 4 December.

Indian copper concentrate imports are set to surge as Adani’s copper unit ramps up capacity (kt)

Source: Kpler

Dry Bulk Freight: Sub-capesizes lean on Atlantic support while Capesize falls further

• Despite support from Australian iron ore and coal spot chartering activity, we expect a further drop Pacific Capesize rates in December as the supply of Capesize ballasters is boosted by vessels completing discharge in China. Demand from other regions in the Pacific is increasingly focused on January 2025 loadings, leaving December activity subdued and spot tonnage abundant. The Pacific round-voyage rate (C10) dropped by $3,023/day net w/w to the lowest point since February 2023 at $8,191/day at time of publication. This represents a discount of $4,630/day to the Atlantic equivalent, the widest since July.
• Looking slightly ahead, we expect some flow of Capesize ballasters repositioning into the Atlantic basin as more cargoes from West Africa are fixed for loadings in late January next year. The Capesize 5TC index dropped by $2,308/day w/w, settling at $10,382/day on 12 December.
• For the sub-Capesize segments, transatlantic rates seem to be the only supporting factor for both Panamax and Supramax vessels, further highlighting weak demand from the Asia-Pacific region. Better import demand from the Continent has helped transatlantic rates resist daily declines otherwise observed across other routes in both vessel segments. Rates for the Panamax transatlantic round-voyage (P1A), which have been marginally firmer, may be at risk as we expect export demand from key regions in the North Atlantic to face competition from spot tonnage shifting focus away from fronthaul trips. Rates for P1A increased by $925/day w/w, settling at $9,395/day on 12 December. However, support from the segment was insufficient, as the 5TC index declined throughout the week, settling at $9,186/day. Meanwhile, the Supramax 11TC index declined by $230/day w/w, closing at $12,142/day on 12 December.

Capesize Atlantic earnings extend premium to the Pacific ($/day)

Source: Baltic Exchange

Key Dry Bulk Market Developments

Source: Kpler

Dry Bulk Port Congestion

Source: Kpler

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