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Brazilian Mining Industry Profits 9% More in Second Quarter with China’s Demand Recovery
In mining, the mining sector was considerably affected by the Covid-19 pandemic, with the worst repercussions expected for this year; however, there are signs of recovery advancing in Brazilian mining. Thus, the Chinese government recently promised to increase its spending on infrastructure construction to offset the pandemic’s impact on the country’s economy, boosting its demand for iron ore to manufacture steel for infrastructure and other construction projects.
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Impact on Brazilian Mining Consumption
Undoubtedly, regarding the mining industry, Covid-19 also had a significant impact on iron ore consumption, which fell by 2.8% to reach 2.03 billion tons in 2020; this reduction is linked to lower construction activity.
Moreover, mining experts indicate that the global construction industry has been severely affected by the virus, with workers unable to return to sites and severe disruptions in the delivery of essential materials and equipment.
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“More generally, the sector will be affected by the widespread disruption expected in economic activities and a likely decline in investments. Alongside planned projects – particularly in the commercial and industrial building sectors – potentially being suspended or canceled,” says the economics expert.
Partner Organizations Expect Prices to Remain High at Least Until the End of the September 2020 Quarter and Return to the Range of $80 to $90 per Ton Next Year.
According to the institute, the increase is explained by China’s recovery after one of the worst phases of the crisis caused by the pandemic in Brazil. The rise of the dollar can also be considered a major contributing factor.
“Iron ore is expected to be traded at $102.28 per metric ton by the end of this quarter. According to the global macro models from Trading Economics and the expectations of analysts in the future. We estimate it will be traded at $89.33 in 12 months,” stated Trading Economics.
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