Australia’s iron ore export shipments picked up by 21% in Mar’21 at 73.7 mn t as compared to 61.1 mn t in Feb’21 on the back of increased imports from China-backed by robust steel demand. Australia’s iron ore exports to China rose to 60 mn t in Mar’21 against 50.4 mn t in the previous month. The monthly average iron ore prices also picked up to $168/t, CNF China in Mar’21 as compared with $164/t, CNF China in Feb’21.
Australia’s iron ore export shipments stood at 202.5 mn t during Q1 CY’21 against 202.08 mn t in Q1 CY’20, according to the vessel lineup data maintained with SteelMint.
Why Australian iron ore exports dropped in Q1 CY’21?
1. Seasonal hindrances: Australian iron ore exports had dropped amid seasonal hindrances like rainfall during 2nd and third week of Jan’21 which impacted export volumes.
2. Chinese production curbs: The stricter production curbs in China’s Tangshan region dampened buying interest. Local authorities announced plans to impose production controls on twenty-three steelmakers from March 20 to Dec. 31 in a bid to lower emissions by 30%-50%.
3. Rise in iron ore inventories: As per data compiled by SteelHome consultancy, Chinese iron ore inventories at major ports increased from 124.25 mn t in early Jan’21 to 133.65 mn t towards Mar’21 end.
Shipments to India recorded nil in Q1 CY’21 Australian iron ore shipments to India dropped to nil in Q1 CY’21. Shipments to India had resumed after a gap of about one and a half years in Nov’20 at 65,000 t.
Australia iron ore exports: Q1 CY’21 v/s Q1 CY’20
Qty in mn t
Source: SteelMint Stats
Provisional Data
Average iron ore prices picked in Q1 CY’21 – The quarterly average global iron ore fines (Fe 62%) index increased to $167/t, CFR China in Q1 CY’21 against $134/t, CFR China in Q4 CY’20.
Exports from Port Hedland fell 7% in Q1 CY’21- In Q1 CY’21, Port Hedland exported 123.7 mn t of iron ore against 127.2 mn t in the Q1 CY’20, registering a 3% drop y-o-y. Walcott stood second-largest exporter at 42.2 mn t, followed by Dampier at 32 mn t, Esperance at 2.5 mn t, and Geraldton at 2 mn t.
Outlook: Rising production curbs in China may continue to hinder Australian iron ore exports for the upcoming months. Recently, four more mills were downgraded in terms of their emission category. These four Tangshan steel mills have been downgraded to grade D, which means they might need to cut 50% emissions when the next round of emergency response comes. This has firmed up market expectations of a reduction in Chinese crude steel output for the whole year.
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