INDEPTH: Oversupply concerns emerge for mid-grade iron ore amid Vale ramp-up

Vale’s plan to increase the supply of its mid-grade blends of iron ore by 40 million tonnes this year as it ramps up blending facilities in China has left some in the market worried about an oversupply.

This comes on top of existing concerns over how the ramp-up of the miner’s S11D project in Brazil’s Carajás region would affect the top-grade iron ore fines segment.
The Brazilian miner is expecting its offshore blending volumes of iron ore to double from around 40 million tonnes in 2016 to 80 million tonnes in 2017, its shipping and iron ore director Luiz Meriz said during his keynote speech at the Singapore Iron Ore Forum at the end of last month.
Those volumes basically refer to the production of Brazilian Blend fines (BRBF), either at a distribution centre in Malaysia or at seaports in China, market participants said.

If so, the proportion of BRBF in Vale’s iron ore output will rise from 11.5% last year to 21.1-22.2% this year, according to Metal Bulletin’s calculations. These are based on the miner’s total output of 348.85 million tonnes in 2016 and...


July Zhang

May 09, 2017

09:25 GMT