Brazil looks to record soybean production, dry freight market weakness persists

Iron Ore & Steel: Iron Ore prices rise ahead of China’s annual economic agenda meeting

• Global seaborne iron ore exports totalled 137.26 Mt in November, almost flat m/m and y/y. While Brazilian shipments are experiencing a seasonal slowdown, Australian loadings held firm thanks to record November exports by FMG and Roy Hill. Notably, Onslow, which made its first shipments in May and had seen consistent growth in exports until October, lost some momentum in November. The flagship project by MinRes recorded loadings of 0.78 Mt, down from 0.90 Mt in October, indicating operational disruptions caused by the mid-November truck crash on its haul road.
• Both Vale and Rio Tinto outlined their production guidance during recent investor meetings. Vale projects output of 325–335 Mt in 2025 and 340–360 Mt in 2026, reaffirming its 2030 guidance of approximately 360 Mt. Meanwhile, Rio Tinto adopted a more cautious stance, maintaining its 2025 shipment target at 323–338 Mt, unchanged from 2024’s guidance. Both miners are on track to meet their 2024 guidance; Kpler Insight will release the December quarter output forecast for iron ore miners, including the two, in early January.
• On the demand side, Chinese seaborne iron ore imports grew by 2.45% y/y to 104.28 Mt in November, contrasting with near-flat or declining imports in other major economies. Crude steel production in China continues to demonstrate anti-seasonal robustness, bolstering demand for iron ore. Output from CISA member mills averaged 2.09 Mt in the last ten days of November, marking a growth of 3.72% y/y. This strength, supported by firmer manufacturing activity and robust steel exports, may extend into December. However, stricter anti-pollution measures during winter could limit capacity utilisation.
• Iron ore prices strengthened over the past week buoyed by stronger-than-expected Chinese manufacturing activity and optimism surrounding the upcoming Central Economic Work Conference (CEWC) in Beijing. The SGX TSI Iron Ore CFR China (62% Fe Fines) benchmark rose 1.48% w/w to $105.34/t on 4 December, while the most-traded contract (January 2025) on the Dalian Commodity Exchange (DCE) climbed 2.53% to a two-month high of 812 yuan/t ($111.80/t). Should the CEWC underdeliver on market expectations for additional stimulus, prices may retreat to near the $100/t mark.

Daily crude steel output by CIS member mills (Mt/day)

Source: CISA, Kpler Insight

Coal: High inventories weigh on thermal coal demand outlook in India, China

• Global seaborne thermal coal imports were nearly unchanged w/w at around 20 Mt. The decline in Chinese receipts was offset by higher deliveries to India and South Korea.
• Chinese buyers imported 8.40 Mt of thermal coal last week, down by around 200,000t w/w. Despite the firm deliveries in November, fundamentals in China are not strong. Coal stocks in the northern and southern regions are rising, with aggregate inventories at the northern ports exceeding 30 Mt this week, the highest since May 2023’s multi-year high of 30.40Mt. We expect that this will reduce the import demand for the winter season over December-February.
• The first 1.10 GW reactor of Zhangzhou nuclear power plant, which is based in the coal-importing region of Fujian, connected to the grid on 28 November. The reactor could reduce the region’s thermal coal import demand by around 3 Mt/year once it starts generating power at full capacity.

China Bohai Rim coal stocks (Mt)

Source: Sxcoal

• Indian thermal coal imports partially rebounded to near 2.50 Mt after falling to a 2024-low of 2 Mt last week. The increasing availability of domestic supply is weighing on import appetite, while coal consumption from the power sector broadly remains in line with 2023 levels. Aggregate coal stocks at the power plants stood at 40.82 Mt, up by 1.50 Mt w/w and 4 Mt m/m.  

India weekly coal-fired generation (GW)

Source: NPP

• European thermal coal imports remained muted last week, but deliveries are set to gain pace in the coming weeks, as traders and buyers are looking to build some stocks ahead of the peak-consumption month in January. Temperatures in Germany stood in line with seasonal norms since the start of winter. Berlin saw 138 and 309 heating degree days (HDD) in October and November, respectively. The aggregate HDDs were up by 5pc y/y during the 61-day period but remained in line with the seasonal average of 438 days.

Berlin heating-degree-days (base 16°C)

Source: Meteostat, Kpler Insight

• The strength in regional gas prices has been supporting European-delivered coal prices in recent weeks. At current future prices, the price of coal is lower than the fuel-switching threshold against gas plants until late-2025. But the limited upside potential for coal burn outlook for the coming months is capping further upside potential for coal prices. The cif Amsterdam-Rotterdam-Antwerp coal price fell by around $7/t w/w to the mid $110s/t this week.  
• A combination of both softer end user demand and supply side constraints are weighing on Australian metallurgical coal shipments. Exports dropped to a four-month low of 12.52 Mt in November, down slightly y/y, as shipments from Hay Point (including Dalrymple Bay Coal Terminal) slumped to a ten-month low of 6.34 Mt. There was a slowdown in shipments to South Korea and a steep y/y drop in exports to India.
• A dispute between labour unions and employers disrupted freight movement out of West Coast Canadian ports and saw metallurgical coal exports plunge to the lowest monthly level since April 2020 in November at 1.40 Mt, down by 1.14 Mt y/y. However, shipments have since rebounded.

Grains & Oilseeds: Brazilian soybean production to hit new record in 2025

• Better rainfall in Brazilian growing regions has increased soybean crop estimates, with some local analysts projecting a 172 Mt crop. This would be a significant increase from the previous record crop of 160 Mt harvested in early 2023. If the higher crop materialises, Brazil is expected to completely dominate the soybean export market for almost the entire year 2025. Exports will continue till late in the year and compete with the 2025/26 US crop for exports in Oct-Nov 2025. Chinese importers will be able to reduce their imports of US soybeans as a result, in the case of a trade war.
• Freight traders will watch Brazilian crop estimates closely, especially as soybean export estimates exceed 105 Mt. Unprecedented congestion was seen at Brazilian ports in 2023 when soybean, corn, and sugar all competed for exports in the second half of the year. Lower volumes, but also investment in infrastructure, contributed to sharply reduced waiting times in 2024.
• Heavy rainfall in parts of Australia is likely to cause quality downgrades for the wheat crop. Rains during harvest reduce the protein content of the grain, relegating it to lower grades. Wheat-growing areas of Southern New South Wales received the most rainfall, and the market is assessing the impact on quality in the region. Latest official estimates from ABARES put the total Australian wheat crop at 31.9 Mt, up 6 Mt from last year.
• In Russia, analysts IKAR are highlighting the poor condition of winter wheat across all growing regions except Volga. Only 15% of the wheat area is classified as good/excellent, increasing the risk of crop losses during harsh conditions through winter. As a result, the crop is more sensitive to cold conditions and winter weather in Russia will be closely watched and traded by the market.
• Russia also announced the wheat export quota for the period 15 Feb—30 Jun 2025 at 11 Mt. The quota system was put in place to avoid over-exporting wheat and to protect the domestic industry. At 11 Mt, it is sharply lower than last year’s 29 Mt, reflecting the tightness in the Russian wheat S&D. The quota is usually allocated to exporting companies based on their share of exports at the beginning of the season.

Port congestion in Brazil by product (count of vessels waiting more than 5 days to load)

Source: Kpler

Minor Bulks: Global bauxite exports strong in November

• Global seaborne bauxite exports finished at 17.22 Mt in November, the second-highest monthly total on record. Guinea led the surge, with exports climbing 32% y/y to a record 11.77 Mt for the month, despite unresolved disputes between Guinea Alumina Corporation (GAC) and local authorities over export resumption. Australian shipments also remained robust at 4.19 Mt, the fourth-highest level ever recorded. For the full year of 2024, Australian exports are expected to grow by over 13% y/y, but this upward trajectory is less likely to persist in 2025. While Rio Tinto has targeted 2025 bauxite production of 57–59 Mt from 53–56 Mt in 2024, the additional output is expected to support local alumina production in Australia rather than boost bauxite exports, following the return to full operating capacity of Gladstone refineries.
• Despite rising bauxite supplies from Guinea during the ongoing dry season (November to April) and higher alumina production anticipated in Australia and Indonesia, concerns over domestic shortages in China continue to drive alumina prices higher. The most actively traded January 2025 alumina contract on the Shanghai Futures Exchange (SHFE) rose 4.47% w/w to a record 5,497 yuan/t ($756.83) on 4 December, reversing the temporary price dip observed in late November.
• Nickel ore exports followed typical seasonal trends, falling to 2.94 Mt in November from 4.90 Mt in October and the August peak of 6.77 Mt. Philippine shipments to Indonesia fell sharply by 80% m/m to 0.24 Mt, their lowest level since May, suggesting Indonesia’s domestic ore shortages have significantly eased. However, with Jakarta planning a new round of compliance checks on environmental and regulatory standards alongside a reassessment of production quotas, Indonesian nickel smelters may continue seeking some supplies from the Philippines, given the tightening regulatory landscape.

Monthly Global seaborne bauxite exports (Mt)

Source: KplerMonthly global seaborne nickel ore exports (Mt)

Source: Kpler

Dry Bulk Freight: Capesize market bearish while sub-Capesizes diverge

Dry Bulk Freight: Capesize market bearish while sub-Capesizes diverge

• Last week, congestion caused by adverse weather in parts of the Pacific failed to support rates as reopened ports quickly increased Capesize spot tonnage availability. This weakness persisted into this week, with Capesize Pacific round-voyage rates (C10) dropping by $9,600/day net w/w to settle at $11,214/day on 5 December. We expect the tonnage build-up in the Pacific to continue capping any upside potential for rates in the region. Additionally, repositioning Capesize vessels from the Pacific to the Atlantic appears unlikely due to weak export demand in the latter. Rates across all Capesize routes followed a similar trend, the 5TC average declined by $6,482/day to $12,690/day on the same date.
• Historically, December sees a surge in shipment volumes for fronthaul trips as charterers prepare for the rainy season in Brazil early next year. However, this year’s surge appears at risk due to subdued spot chartering activity and a fast-approaching holiday season.
• Rates in the sub-Capesize segments softened w/w but have begun to show marginal signs of improvement. The 5TC average settled at $9,364/day on 5 November after finding a floor in recent days. Notably, the Brazil round voyage (P6) rose by $1,352/day w/w, indicating some upside potential in Panamax rates. The Supramax TC average was flat w/w at $12,372/day, with support stemming from an imbalance in the distribution of laden and ballast vessels in parts of the Atlantic rather than stronger export demand.

Dry Time-charter Earning ($/day)

Source: Baltic Exchange

Key Dry Bulk Market Developments

Source: Kpler

Dry Bulk Port Congestion

Source: Kpler

Want access to Insights on a regular basis?

Through unbiased, expert-driven research and news, you’ll receive valuable information on supply, demand, and market movements, enabling you to make informed trading and risk management decisions.

Unbiased. Precise. Essential.

Curious? Request access to Kpler Insight today.