Usiminas Idles a Minas Gerais Mine as Freight Costs Outrun the Ore Price
BRAZIL · MINING
Key Facts
- —The shutdown Mineração Usiminas has idled its Samambaia plant at Itatiaiuçu in Minas Gerais.
- —The share Sources put the unit at 30 to 35 percent of the company’s iron ore output.
- —The jobs Around 300 dismissals are circulating locally. The company has not confirmed the figure.
- —The price Iron ore was at US$99.34 a tonne on the Singapore exchange, below the US$100 line.
- —The freight Shipping to China rose to US$35 to US$38 a tonne, against a prior range of US$22 to US$23.
- —The cause Part of the freight spike is attributed to shipping disruption linked to the conflict involving Iran.
The iron ore price fell below US$100 and the cost of shipping it to China rose by half. A mine in Minas Gerais stopped.
Mineração Usiminas has suspended operations at its Samambaia plant in Itatiaiuçu, Minas Gerais, a unit accounting for up to 35 percent of the company’s iron ore production.
What Stopped
Samambaia is a mining plant, not a steel mill. The distinction matters because Usiminas is best known as a steelmaker and this is its iron ore arm.
Sources vary on the unit’s share of output between 30 and 35 percent, with most describing it as up to 35 percent.
Around 300 dismissals have been reported locally. The company has not confirmed that number, and The Rio Times reports it as unconfirmed.
The Squeeze
Iron ore traded at US$99.34 a tonne on the Singapore exchange, below the psychologically important US$100 level.
At the same time, maritime freight to China rose to between US$35 and US$38 a tonne, against a prior range of US$22 to US$23. Part of that increase is attributed to shipping disruption connected to the conflict involving Iran rather than to demand on the China route itself.
Put together: the delivered price fell and the cost of delivering rose by more than half. For a producer whose ore is not premium grade and whose distance to port is not short, that combination closes the margin quickly.
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| ENEV3 | 24.21 | -1.38% | +70.49% | 24.55 | 24.64 | 23.99 | 9,297,000 |
The Wider Reading
Brazil’s iron ore economics have been squeezed from both directions this year. Chinese steel demand has been soft, and the freight leg has been repricing on geopolitical risk that has nothing to do with either producer or customer.
A mine that idles because of freight rather than because of ore price is a different signal from one that idles on demand. Freight can reverse quickly. Whether Samambaia restarts is therefore a question about the Red Sea and the Gulf as much as about Minas Gerais.
More: Brazil news in English, every day from The Rio Times.
Frequently Asked Questions
What has Usiminas shut down?
The Samambaia mining plant at Itatiaiuçu in Minas Gerais, operated by Mineração Usiminas.
How much production does it represent?
Sources put it at 30 to 35 percent of the company’s iron ore output.
How many jobs are affected?
Around 300 dismissals have been reported locally, but the company has not confirmed the figure.
Why did it stop?
Iron ore fell to US$99.34 a tonne while freight to China rose to US$35 to US$38, from US$22 to US$23.
Is this a steel plant?
No. It is an iron ore mining unit, not a steel mill.
Sources: Revista Mineracao, Portal G37.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error
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