December 11, 2024

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.