World’s 2nd largest iron ore miner – Rio Tinto has temporarily shut operations in Western Australia’s Pilbara region in preparation for the severe weather event by cyclone Veronica. Rio Tinto’s Pilbara iron ore shipments reported at 338.2 MnT, up against 330.2 MnT shipments in CY17.
Besides, major miners BHP and FMG operations have also been hampered amidst operation halt at Port Hedland, the world’s largest bulk export port.
Port Hedland still on Red Alert
Australia is world’s largest exporter of iron ore with about 95% of iron ore accounting from Port Hedland, Dampier and Cape Lambert. All the three ports have been suspended last week (22nd Mar) amidst the cyclone. Even after closure for three days, the Pilbara port authority remains uncertain for the resumption at ports. Exports from the three ports by BHP Billtion and Rio Tinto remains shut for uncertain period of time.
According to data maintained with SteelMint, Australia iron ore exports stood at around 853 MnT in CY18. Out of this, exports from Port Hedland was recorded at 508 MnT.
Amidst iron ore supply shortage from world’s largest iron ore miner-Vale caused due to dam disaster on 25th Jan’19, the supply constraints by Australia’s major miners is expected to lift the global iron ore prices in near term. Besides, the Chinese market which marks the largest construction activities post Mar every year will suffer amidst being largest importer of Australian ore. According to data maintained with SteelMint, Australian iron ore exports to China in Feb’19 recorded at 56.05 MnT, contributing 83% of total Australian exports for the month, up 4% against 53.67 MnT in Jan’19.
As per reports, towards second week of Mar (4th -10th Mar), Australian exports dropped around 13% W-o-W to around 15 MnT due to maintenance work at Port Dampier and Port Hedland. Further the cyclone affect is expected to drop down Australian exports for the month.
Impact on iron ore prices
Spot iron ore fines (Fe 62%) index in China increased towards the close of last week and was recorded at USD 86.8/MT, CFR China higher by USD 2.7/MT D-o-D basis.
Today, Dalian iron ore futures increased 0.2% in early trading sessions.
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