Brazilian iron ore exports indicate the volume of iron ore being shipped out of Brazilian ports to China and the rest of the world. Brazil accounts for ~25% of the global market share of iron ore trade volume. It’s the second largest iron ore exporting country. Brazil also has one of the largest mining companies—Vale SA (VALE).
Shipments from Brazil are a key metric for investors to watch, along with shipments out of Australia. The data is released by Brazil’s foreign trade department, MDIC, on a monthly basis.
February volumes were strong
Brazil had a stronger run at iron ore exports in February. It had relatively weak data in January. After a 37.7% slide in Januart, exports grew 8.4% month-over-month in February. Iron ore and pellet exports were 25.3 million tons in February—compared to 23.3 million tons in January.
Impact on companies
The strong volumes reversed the negative sentiment around Brazilian exports after the significant volume decline in January shipments. In the glut created by strong production and resultant strong exports, only large, low-cost players like Vale, BHP Billiton (BHP), and Rio Tinto (RIO) are making money. Smaller players, like Cliffs Natural Resources (CLF), are getting impacted negatively.
Also, it negatively impacts the iShares MSCI Global Metals & Mining Producers ETF (PICK). BHP makes up 18.5% of PICK’s holdings. The SPDR S&P Metals & Mining ETF (XME) also invests in some of these stocks.