Despite weakening activity levels and rising Covid cases, a big rise in iron ore exports to China saw Australian shippers using Port Hedland (the world’s biggest port by volume) enjoy the best of both worlds in March and the March quarter.
While exports to China rose in both the month of March and the quarter, shipments to South Korea and Japan, the two other major markets were mixed and in fact down quarter on quarter with the start of 2021.
The solid performance last month for companies like BHP, Fortescue and Roy Hill through Port Hedland capped an equally good March quarter which saw a nice rise in world prices for the key steelmaking raw material and a solid rise in volumes.
Volumes were up overall, thanks to higher shipments to China and iron ore prices were up by more than 35% to just over $US160 a tonne – a long way from the $US87 a tonne last November and $US115 a tonne at the end of December for the benchmark 62% Fe fines shipped to northern China.
However, prices have weakened back to around $US150 a tonne according to the Singapore futures market and the Metal Bulletin data as steel mills cut purchases because of Covid related lockdowns on steelmaking cities (such as Tangshan) and Shanghai where at least three major steel consuming car plans have suspended production because of the virus.
According to Nomura economists around 45 Chinese cities, led by Shanghai, are under some degree of lockdown at the moment including a number of ports.
With lockdowns dominating China so far in April, it’s unlikely iron ore exports from Australia this month will repeat the solid performance of March.
Data from the Pilbara Ports Authority late Monday revealed that iron ore exports in March were 46.507 million tonnes, virtually unchanged from the 45.672 million shipped in March, 2021, but up sharply from the 39.44 million tonnes shipped in February.
Exports to China edged up to 39.505 million tonnes from 38.145 million tonnes a year ago and jumped 18% from the 33.367 million tonnes shipped in February when volumes were cut, as usual by the week long Lunar New Year break.
For the quarter total exports were up 6% to 133.9 million tonnes, from 126.39 million a year ago. the driver was the 8.5% rise in exports to China (mostly in January) to 113.326 million tonnes from 104.43 million in the first three months of 2021.
For the quarter exports to Japan fell more than 11% to 6.05 million tonnes from 6.49 million tonnes while shipments to South Korea (much of it to Posco from the Roy Hill mine of Gina Rinehart was around 2 million tonnes lower at 9.18 million tonnes.
