Australian exports of iron ore to China from Port Hedland, which handles a quarter of the world’s seaborne steelmaking material, rebounded in July to hit a record high in a sign of still robust demand, figures released on Thursday showed.
Shipments to China over July rose 4.8 percent month-on-month to 30.57 million tonnes, from 29.18 million tonnes in June, according to the Port Hedland Port Authority. That was up no less than 50 percent on July last year.
Rising output and shipments to China, the main destination for sea-traded iron ore, comes amid a market correction that has seen the price of the ingredient drop by nearly a third so far this year.
Benchmark iron ore for immediate delivery to China <.IO62-CNI=SI> stands at $95.90 a tonne, according to Steel Index.
World No.3 producer BHP Billiton , with the ability to mine more than 220 million tonnes of iron ore a year, is Port Hedland’s main user. Future expansion work could see BHP’s iron ore capacity climb to 270 million tonnes.
Fortescue Metals Group also uses the port to ship up to 155 million tonnes annually.
Overall shipments of iron ore from Port Hedland climbed to a record 36.08 million tonnes in July from 33.6 million tonnes in June, with sales to Japan up by almost a million tonnes.
The impressive numbers come as tug boat engineers at Port Hedland intend to stop work for four hours on Aug. 9, 11 and 13 over a pay dispute.
As of July 1, the Port Hedland Port Authority has amalgamated with the port of Dampier, creating what it says will be the largest bulk export tonnage port in the world.
The newly-formed Pilbara Ports Authority will handle about 22 percent of the world’s iron ore market, it said. The port at Dampier is one of two in the Pilbara iron ore belt used by Rio Tinto . The other is Cape Lambert.
The decline in the iron ore price and concerns over China’s economic growth has seen BHP and Rio Tinto, an even bigger iron ore producer, trading at increased discounts to fair value, according to Morningstar Equities.
February 19, 2015
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