Australia’s total iron ore export shipments were recorded at 874.96 mn t for CY’20. Shipments increased by 3% as against 848.15 mn t in CY’19, according to the vessel line up data maintained with SteelMint. Australian iron ore exports picked on rising Chinese demand.
Australia’s total iron ore export shipments were recorded at 78.24 mn t for Dec’20. Shipments picked by 11% on a monthly basis against 70.36 mn t in Nov’20.
Australia’s iron ore export shipments to China up 5% in CY’20 –
Australia’s iron ore export shipments to China stood at 728.4 mnt in CY’20, up 5% against 695.54 mnt in CY’19. South Korea stood as the second-largest importer for the year at 58.8 mnt (up 5% y-o-y) followed by Japan at 55.4 mnt.
Shipments to India fell in CY20 – Australian iron ore shipments to India fell to 0.07 mn t as compared to 0.19 mn t in CY’19 as domestic ore was preferred. However, with the delayed resumption of auctioned mining leases in Odisha, Australian iron ore export shipments to India resumed after a gap of about one and a half years in Nov’20. Export shipments to India stood at 65,000 t in Nov’20 with last exports witnessed in Mar’19 at 185,000 t.
Key factors that governed Australia iron ore export:
- Rise in global iron ore prices: The yearly average global iron ore fines (Fe 62%) prices increased to $108/t CFR China in CY’20 as against $93.5/t CFR China in CY’19. Thus, on y-o-y basis, prices increased by 16%. Spot iron ore fines (Fe 62%) index increased to a nine-year high to $177/t CFR China in the last week of Dec’20. The rise in prices favoured exports.
- COVID related disruptions at port: The exports were on lower side towards first quarter due to COVID related disruption. However, towards Q2 CY20, with rising Chinese demand and material constraints from Brazil due to rising COVID cases, Australian iron ore favoured. Later, towards the end of Q3 CY20, exports were affected by a fourteen-day quarantine rule at major Australian ports which negatively affected the exports.
Towards end of CY’20 the major Australian port, Port Hedland was put to weather-related shutdown affecting the shipments. However, the port resumed and recorded an increase in exports to Chinese mills.
Australia iron ore exports: CY’20 v/s CY’19
Qty in mn t
Source: SteelMint Stats
Provisional Data
Exports from Port Hedland increase by 4% in CY’20
In CY’20, Port Hedland exported 536.6 mn t of iron ore against 513.6 mn t in CY’19, registering a 4% rise. Walcott stood second-largest exporter at 183.6 mn t, followed by Dampier at 134.9 mn t, Geraldton at 10.39 mn t and Esperance at 9.34 mn t.
Outlook – China restocking ahead of Lunar New Year holidays are expected to further push Australian exports. However, heavy rainfall and cyclone threats may have a negative impact on Australian exports during the next month.
Also, China is looking to reduce dependency on Australian iron ore and so aims to build two major overseas mines by 2025 under a five-year government plan. Equity output from stakes held by Chinese firms in overseas mines should account for more than 20% of iron ore imports by that year, according to a five-year plan for the steel sector published by the Ministry of Industry and Information Technology (MIIT). This may, in the long term, crunch Australian iron ore exports.
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