Interfax-China reported that Brazil's Vale the world largest iron ore producer shipped 34.63 million tonnes of iron ore to China in the Q1 of 2009 which marks a quarterly record.
According to Vale's Q1 report, China's imports from Vale in the Q1 surpassed the previous high of 28.19 million tonnes for the Q3 of 2008.
Vale attributed the record to a rebound in China's demand for minerals and metals and a jump in sales due to more contracts with medium-sized steel mills. In addition, Vale has also adopted a more flexible iron ore pricing scheme including provisional pricing.
Vale predicted that looser credit and government-sponsored infrastructure investment will lead to an increase in domestic demand and subsequently bolster China's economy over the next three quarters. However, iron ore demand outside of China remains extremely weak as Japan, the world's second largest importer, reduced its purchases in the Q1 by 34.4%YoY.
According to the report, iron ore sales to China now account for 66.5% of Vale's total compared with 8.2% for Japan, 6.7% for Brazil and 6.1% for South Korea. Although iron ore shipments to China hit a record high, Vale's gross revenue for the Q1 dropped by 27.2% from the Q4 of 2008 to USD 5.42 billion because of the drop in both prices and sales volumes of iron ore and other mineral products.
Vale said its iron ore revenues fell by USD 555 million over that period due to the decline in prices.
(Sourced from Interfax-China)
