Brazil iron ore imports
Brazil is the second largest iron ore exporting country accounting for almost 25% of market share. The country is home to Vale, one of the largest mining companies. Therefore, shipments out of Brazil are a key metric to watch as higher export volumes have a positive effect on shipping rates, which are a critical variable that moves dry bulk shipping companies’ revenues, earnings, cash flows, and share prices.
November export dips
According to the Brazilian Ministry of Development, Industry and Foreign Trade, Brazil’s iron ore export volume amounted to 25.96 million tonnes in November 2014, decreasing by 18.3% compared to October 2014 and down 16% compared to November 2013.
After the Port Hedland statistics of lower iron ore exports were revealed, Vale, the world’s biggest iron ore producer, warned that the company’s production of iron ore up to 220 million tonnes will be unviable if the prevailing prices continue in 2015.
Vale is in the middle of building new operations in the Carajas region of Brazil, which will grow its iron ore exports by 90 million tonnes a year. The company expects to be producing 411 million tonnes by 2017 and 459 million tonnes by 2019.
Due to Vale’s comments, larger shipping companies like DryShips Inc. (DRYS), Diana Shipping Inc. (DSX), Navios Maritime Partners LP (NMM), Navios Maritime Holdings Inc. (NM), Safe Bulkers Inc. (SB), and the Guggenheim Shipping ETF (SEA) may trade in the positive.