Australia: Iron ore export shipments drop 17% m-o-m in Feb'24

Australia's iron ore and pellet export shipments fell by 17% m-o-m to 57.5 million tonnes (mnt) in February 2024 compared to 69.1 mnt in January, as per vessel line-up data maintained with BigMint. Meanwhile, shipments dipped by 7% y-o-y to 57.5 mnt in February, 2024 compared to 62 mnt in February, 2023.

Iron ore export shipments from Australia witnessed a sharp drop in February following the sluggish demand amid the Lunar New Year holidays in China. Major Chinese steel mills capitalized on the holidays and kept their blast furnace on maintenance shutdown during the period.

Exports to China down 15%

Australia's iron ore exports to the world's largest importer, China, were recorded at 48.2 mnt in February, decreasing by 15% m-o-m against 56.8 mnt in January.

Chinese steel mills, started procuring iron ore well in advance, ahead of the holidays, that led to the demand fall in February. The Chinese mills were more concerned about getting undisrupted shipments before the holidays so that they could continue seamless operation after the holidays. According to sources, decent inventory levels at portside followed by poor steel demand and lack of margins forced steelmakers to cut iron ore shipment post-holidays.

Iron ore ports inventory increased by 10 mnt m-o-m in February. According to Steelhome data, Chinese ports inventory was recorded at a one-year high at 131 mnt in February. Thus, the high inventory at ports reduced iron ore export from Australia to China.

Japan and South Korea were the other major importers from Australia in February. The latter supplied 3.4 mnt to Japan, down 27% m-o-m, while 3 mnt were shipped to South Korea, down 35%.

Shipper-wise performance

Rio Tinto's iron ore shipments were the highest at 19.4 mnt in February, down 25% m-o-m against 26 mnt in January. BHP and FMG shipped 18.5 mnt and 13.3 mnt, respectively.

Port-wise exports

Port Hedland exported 36.5 mnt of iron ore in February, dipping by 12% m-o-m compared to 41.3 mnt in January followed by Port Walcott at 10.6 mnt, down by 29% m-o-m. Meanwhile, Port Dampier fell by 21% m-o-m to 8.8 mnt.

Price trends

Monthly average Australian Fe62% iron ore prices sharply decreased by $9/t m-o-m to $126/t CFR China in February against $135/t a month ago.

Outlook

Iron ore exports from Australia are expected to improve in March as Chinese steel mills may operate their blast furnaces at full capacity. It may be recalled, these had been reduced during the Lunar holidays. However, market participants expect the price and iron ore demand trends to be clearer after China's "Two Sessions" meeting schedule in the first week of March.