Australia: Iron ore export shipments drop 15% m-o-m in July'24

Australia's iron ore and pellet export shipments dropped 15% m-o-m to 67.8 million tonnes (mnt) in July 2024 compared to 80.2 mnt in June, as per vessel line-up data maintained with BigMint. Meanwhile, shipments fell by 3% y-o-y in July 2024 compared to 69.6 mnt in July 2023.

As per market sources, major mines were under maintenance in July and had low stocks due to fiscal year-end in June. However, they pushed volumes into the export market in the last quarter to meet their half-early targets.

Chinese steel mills are facing low steel demand amid high iron ore inventory at ports. Economic challenges in China, including weak macroeconomic indicators and a decline in industrial production, have reduced the appetite for raw materials.

Exports to China down 21%

Australia's iron ore exports to the world's largest importer, China, were recorded at 54.3 mnt in July, down 21% m-o-m against 68.8 mnt in June.

South Korea and Japan were the other major importers from Australia in July: while Korea imported 5.8 mnt (up 57% m-o-m) around 4.4 mnt was shipped to Japan, down 15% m-o-m.

The accumulation of high iron ore stocks at Chinese ports further diminished the need for new cargoes. With ample supply already in hand, Chinese buyers have less urgency to import additional iron ore, leading to reduced exports from Australia.

Shipper-wise performance

Rio Tinto's iron ore shipments were the highest at 25.4 mnt in July, down 5% m-o-m. BHP and FMG shipped 22.3 mnt and 14.4 mnt, down 14% and 28%, respectively.

Port-wise exports

Port Hedland exported 41 mnt of iron ore in July, a drop of 21% m-o-m compared to 52 mnt in April followed by Port Walcott at 14.2 mnt, down 5% m-o-m. Meanwhile, shipments from Port Dampier dipped 5% m-o-m to 11.2 mnt.

Price trends

Monthly average Australian Fe 62% iron ore prices inched down by $1/t m-o-m to $106/t CFR China against $107/t a month ago.

Outlook

Australia's iron ore export shipments are likely to remain under pressure due to persistent weak demand from China. With high iron ore stocks at Chinese ports, the appetite for new imports is expected to stay sluggish. However, the overall outlook will heavily depend on Chinese port inventory levels and demand fluctuations.