Monthly iron ore shipments from Australia, Brazil, South Africa (Mt)
Australia (AU), Brazil (BR), South Africa (SA) shipments lift in April; AU still strong, BR starting to recover
Iron ore shipments from key producers in AU, BR & SA are up +9% year over year in April (daily rate +5% month over month) with AU +10% year over year & BR +21%, while SA is -43%. Iron ore prices have held up in 2020 as fundamentals are robust, with Chinese demand strong (pig iron +2.4% year to date) while supply is soft (shipments -2% year to date); in China iron ore inventory at ports & in vessels outside ports as well as steel inventory is still falling. We see 2 key risks near-term: 1) blast furnaces outside China are being curtailed; 2) iron ore shipments lift seasonally in May/ June. We expect iron ore prices to trend down to the marginal cost of ~$65/t over 18m.