Freight Up 50%, Mills Won’t Pay: Brazil’s Small Miners Squeezed From Both Ends, So Why Won’t Vale Cut?
On 29 September, CSN Mineração issued a material fact announcing a temporary cut in iron ore output at the dry processing plant of its Pires Complex in Ouro Preto, Minas Gerais, citing current market conditions, low ore prices and high ocean freight. Because of the cut and lower third-party purchases expected in the coming months, ...
Brazil's small miners are feeling the squeeze from both higher freight costs and lower ore prices, leading to production cuts and reduced guidance. CSN Mineração, Mineração Usiminas, and Itaminas have all announced temporary production cuts in response to current market conditions. The cuts come as freight rates have risen sharply after the Middle East conflict escalated, reaching a peak of USD 43.38/t on September 23.
The increase in freight costs has eroded margins, especially for lower-grade ore, which is charged by the wet tonne. Meanwhile, steel mills are experiencing negative margins due to tighter coking coal supply and rising coke prices. Rio Tinto's Simandou operation, while important, has yet to reach full production rates, leaving little impact on Atlantic tonnage demand.
With high import volumes and ample stockpiles in China, Brazilian miners may face increased competition for shipping capacity in the future.
Written by urgent.news from Hellenic Shipping News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.