Brazilian iron ore drives Capesize upside despite ballast build-up in Asia-Pacific

Iron ore & steel: Baffinland opens for business, pushing up Canadian iron ore exports

• Global seaborne iron ore exports dropped to a three-month low of 30.20 Mt in the week ending 10 August, falling short of the previous five-year average of 31.60 Mt for the period. The decline comes as both FMG and Hancock Iron Ore shipments dip to multi-month lows due to maintenance works. Meanwhile, Canadian exports reached a nine-month high of 1.40 Mt as Baffinland resumed operations in line with its traditional summer shipping window.
• In Russia, the Taman terminal handled its first iron ore exports since 2023, with a Panamax and Capesize vessel departing in late July and early August, respectively. This is likely because soft demand for coal transport has freed some capacity for other bulk cargo. Nevertheless, the majority of Russia’s iron ore exports continue to originate from Novorossiysk, Murmansk, and Ust-Luga, a trend unlikely to change in the near term.
• On the demand side, Chinese seaborne iron ore imports soared by a quarter w/w and 12% y/y to 28.65 Mt last week, one of the highest on record. The rise reflects the clearing of weather-related backlogs after multiple typhoons, alongside a seasonal peak in shipments from Brazil. Meanwhile, crude steel production by CISA member mills averaged 2.07 Mt in the first ten days of August. Although the reading improved from the year-to-date low of 1.98 Mt in late July, it remains subdued compared to the previous months.
• Despite modest fundamentals, iron ore prices remained resilient over the past week, partially supported by buoyant market sentiment following the US-China tariff truce for another 90 days. The most-traded contract on DCE, January 2026, closed flat w/w at 775 yuan/t ($107.93/t) on 14 August, while the SGX TSI 62% Fe second-month contract edged up by 0.09% to $102.35/t at the time of writing. We continue to believe that the recent price strength is unsustainable given the absence of firm demand-side drivers.