Australia iron ore export shipments up 8%, m-o-m, in May’22 on active China buying

Australia’s iron ore (including pellets) export shipments witnessed an increase of 8% in May 2022 to 73.18 million tonnes (mnt) as compared to 68.05 mnt in April 2022, as per vessel line-up data maintained with SteelMint.

Exports to China up 9%

Australia’s iron ore export shipments to the largest importer, China, recorded a 9% m-o-m increase at 61.26 mnt in May as against the previous month’s 56.28 mnt, thus, increasing the overall export volumes. China’s iron ore sourcing most probably increased as Covid-19 restrictions eased in the country.

Japan was the second-largest among the top importers’ list in May 2022. The country imported 5.12 mnt of iron ore from Australia. The third largest importer was South Korea at 3.90 mnt.

Shipper-wise performance – BHP’s shipments stood at 35.63 mnt in May followed by Rio Tinto and Fortescue Metals at 24.98 mnt and 6.58 mnt, respectively.

Exports from Port Hedland edge up – Port Hedland exported 46.2 mnt of iron ore in the month under review, inching up by 5% m-o-m compared to 43.9 mnt in April. Exports from Port Walcott stood at 14.96 mnt, followed by Port Dampier at 10.01 mnt.

Outlook – The fundamentals of global iron ore prices remain supported, as the extension of the shipping schedule has reduced the proportion of shipments to China, resulting in a decline in port inventory. On the other hand, the inventory of scrap steel base is low as the supply is tight. Therefore, long-process steel mills have gradually reduced the proportion of scrap added for steel-making and replaced it with pig iron. Thus, demand for iron ore is picking up and expected to remain supported in the near term.