Port Hedland, the largest iron ore terminal in Western Australia, saw its iron ore shipments to China decline to 40.5 million tonnes in July, lower by 3.8 million tonnes or 9% from June after the rises of the prior two months, according to new data released by the Pilbara Ports Authority (PPA). The volume was higher by 4.8% from July 2021, however.
During last month, Port Hedland dispatched 46.9 million tonnes of iron ore to global destinations, with the total tonnage also thinning by 6% on month though rising by 6% on year, the PPA data showed.
In general, iron ore mining companies such as Australia’s BHP and Fortescue Metals Group stepped up maintenance on their production facilities in July – having beefed up production and shipments and run machinery hard towards the end of Australia’s fiscal year on June 30 – leading to lower ore shipments departing from Port Hedland worldwide, Mysteel Global noted.
The smaller on-month dip in Hedland’s total shipments reflected that fact that while consignments to China might have slipped MoM, steelmakers in South Korea and Japan, traditionally the second- and third-largest destinations for Hedland ore, both received more iron ore from the port, the PPA data show. Shipments to Korea surged by 24% on month to 3.2 million tonnes and those to Japan by 14% to 2 million tonnes.
As a result, the share of Hedland shipments to China in the total was 86% in July, or 3 percentage points lower on month, Mysteel Global calculated.
After long being hurt by poor profits and the deteriorating supply-demand imbalance of finished steel, many Chinese steelmakers chose to reduce their steel output in July by conducting maintenance on their blast furnaces (BFs), as reported. Little surprise then that last month, the mills’ demand for ore weakened.
The BF capacity utilization rate among the 247 Chinese steel mills canvassed in Mysteel’s survey had dropped to 79.3% over July 22-28, the lowest since late February and down by 8.31 percentage points from that over June 24-30, the survey showed.
Despite the fall in iron ore shipments arriving at Chinese ports last month, wharf-side stocks continued to mount because mills were inactive in hauling ore from ports. Inventories of Australian-origin iron ore at the 45 Chinese major ports under Mysteel’s survey climbed to 62.1 million tonnes as of July 28, higher by 2.7 million tonnes from the level as of June 30.
Written by Lea Li, liye@mysteel.com
Edited by Zhenqi Yang, yangzhenqi@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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