São Paulo – Despite Brazil having increased international ore shipments, shipments to the Arab countries dropped 6.24% from January to September 2012 as against the same period this year, according to the Ministry of Development, Industry and Foreign Trade. Sales to the world totalled 242.4 million tonnes, whereas those to the Arab nations totalled 15.3 million tonnes. In revenues, there was a similar movement in the period, with growth of 1.58% of revenues obtained with total exports, reaching US$ 24.8 billion, and a drop of 11.06% to the Arabs, with US$ 1.6 billion.
According to the chief economist of the Federation of Industries of the State of Minas Gerais (Fiemg), Paulo Roberto Santos Casaca, this drop is normally connected to deceleration of ironworks products. Ore is used to make products like iron and steel, used in the auto and building industries, among others.
The Arab country that imported most ore from Brazil in the first nine months of the year was Oman, but sales to the country grew 3%. The second main buyer was Egypt, with a reduction of 5%, then came Bahrain, with a drop of 48%, and the Emirates, with a 19.4% lower import volume, and the fourth was Libya, with growth of 176%.
Both in shipments to the Arab world and to other nations, the change in volume was greater than the change in revenues, showing a price drop. Casaca recalls that halfway through February this year, ore prices were US$ 150 a tonne on the spot market, but dropped to US$ 114 in June, but on Wednesday last week (30) each tonne was sold at US$ 131.
The price movement of the commodity is greatly connected to the demand in China, which is the world’s main consumer of the product. With the recovery of the Chinese economy in the second half of the year, with a better result in the third quarter, ore values have started rising. In the case of the state of Minas Gerais, a great producer of ores, 64% of product exports go to China.
Brazil also faced problems in extraction of the commodity, due to excessive rain in the second quarter, according to Casaca. If it were not for that, the pressure for price drops could have been even greater in the first half of this year.
In September, exports of ores started rising. There was growth both in shipments in general and to the Arab world. Brazilian sales as a whole grew 6.17% in volume and 14.4% in revenues, with 29.8 million tonnes and US$ 2.9 billion, respectively. Exports to the Arab world rose 28% in volume, to 2.3 million tonnes, and 55% in revenues, to US$ 257.6 million tonnes. The growth was boosted by sales to Libya.
*Translated by Mark Ament
