The global iron ore seaborne trade has trended lower so far this year, mainly as a result of China’s diminishing iron ore imports. In its latest weekly report, shipbroker Banchero Costa said that “global iron ore loadings in the full 12 months of 2021 were up +0.7% y-o-y to 1,555.3 mln t, according to vessels tracking data from Refinitiv. So far in 2022, iron ore trade softened again, primarily due to weaker demand from China and supply issues in Brazil. In January-August 2022, global iron ore loadings declined by -2.6% y-o-y to 993.8 mln tonnes, from 1020.6 mln t in the same period of 2021. Exports from Australia increased by +0.7% y-o-y in Jan-Aug 2022 to 584.3 mln tonnes, just a little below 2020 levels, which was the most recent record high, and above the levels of 2018 and 2019. Exports from Brazil, on the other hand, declined by -4.5% y-o-y so far this year to 218.0 mln tonnes, from 228.2 mln tonnes in the same period of last year, although they were still higher than in 2020”.

According to the shipbroker, “demand is weighted down by a weakening economy in China, with iron ore imports into the country down by -1.9% y-o-y to 706.3 mln tonnes in the first 8 months of 2022. On the other hand, the European Union is seeing a revival, with imports up +3.6% y-o-y to 56.5 mln tonnes in the same period. Imports into Europe, however, are still well below the levels of 2019 (62.8 mln t in the Jan-Aug period of that year) and 2018 (65.7 mln t)”.

“Canada is the fourth largest exporter of iron ore in the world, after Australia, Brazil, and South Africa. In Jan-Aug 2022, Canada accounted for 3.3% of global seaborne iron ore shipments. Seaborne iron ore exports from Canada peaked in 2020, and have been declining since. Canada’s iron ore exports in the 12 months of 2020 increased by +10.3% y-o-y to 56.6 mln t, from 51.4 mln t in 2019. That was itself up +8.4% from 47.4 mln t in 2018. In 2021, however, Canada exported just 53.1 mln t of iron ore, which represented a -6.2% y-o-y decline. So far this year we have seen a continuation of this negative trend. In the first 8 months of 2022, Canada exported 32.8 mln tonnes of iron ore, which was a -3.5% y-o-y decline from the 33.9 mln tonnes shipped in the same period of last year. The vast majority of Canadian iron ore exports are loaded in the St. Lawrence river, in the east of the country”.

Banchero Costa added that “the largest loading port by volumes is Sept-Iles (Seven Islands), with 18.3 mln tonnes of iron ore loaded in the first 8 months of 2022. Another 12.8 mln tonnes of iron ore were loaded this year from nearby Port Cartier. Additionally, 1.7 mln tonnes were loaded this year from Milne Inlet on Baffin Island, far north in the Arctic. Given the location of the load ports, the natural market for Canadian iron ore is the Atlantic Basin. Nevertheless, given the limited size and lack of growth potential of the European market, Canada has quite successfully diversified also into the Asian markets. The European Union is still by far the top destination, accounting for 39.8% of Canada’s total iron ore exports so far in 2022. The EU, which was already the top buyer of Canadian seaborne iron ore, further increased volumes by +4.5% y-o-y in Jan-Aug 2022 to 13.0 mln t in Jan-Aug 2021, from 12.5 mln t in the same period of 2021. However, this was still well below the 13.8 mln tonnes Canada exported to the EU in Jan-Aug 2019. The second top destination for Canada’s iron ore exports is Mainland China, accounting for a 20.8% share. Shipments from Canada to China declined by -18.8% y-o-y to 6.8 mln tonnes in the first 8 months of 2022, from 8.4 mln tonnes in Jan-Aug 2021. They were also well below the record 12.4 mln tonnes shipped in Jan-Aug 2020. In third place was Japan, with 3.6 mln tonnes in Jan-Aug 2022, down -20.6% y-o-y. Japan accounts for 11.1% of Canada’s total exports”, the shipbroker concluded.

Source: Hellenic Shipping News