Australia: Iron ore export shipments rise 2% y-o-y in Jan-May'24

Australia's iron ore and pellet export shipments marginally rose by 2% y-o-y to 347 million tonnes (mnt) in Jan-May 2024 compared to 340 mnt in Jan-May 2023, as per vessel line-up data maintained with BigMint. Meanwhile, shipments rose by 8% m-o-m to 74.6 mnt in May'24 compared to 69.3 mnt in Apr'24. Notably, volumes have recovered after hitting 5-year low in Feb'24 owing to unfavourable weather in January, causing heavy rain that messed up mining operations and logistics.

Southeast Asian countries saw a surge in iron ore export due to a significant rise in steel production from the BF route. This led to an increase in the demand for raw materials, resulting in more iron ore exports from Australia. As per reports Indonesia's Dexin Steel following the recent expansion, Dexin plans to launch hot-rolled coil production at the end of June this year, adding 2 million tons per year of this product to the market.

In addition, Vietnam's Hoa Phat set to produce more HRC by the year-end, with a full designed capacity of 2.7 mnt per year at the Dung Quat 2 mill, next to the Dung Quat 1 mill

Moreover, in India imports become economically viable in this period due to logistical impediments & high freight rates in movement of domestic ore from eastern India. Meanwhile, domestic iron ore contains a higher level of gangue as compared to imported ore. In addition to expensive domestic shipping costs, challenges like a lack of rail transportation posed significant obstacles for mills. This has also supported the iron ore export shipment from Australia in Jan-May'24.

Exports to China up in Jan-May'24

Australia's iron ore exports to the world's largest importer, China, were recorded at 291 mnt in Jan-May'24, increased marginally by 1% y-o-y against 287 mnt in Jan-May'23. Meanwhile, exports rose by 8% m-o-m to 62.8 mnt in May'24 as against 58.3 mnt in Apr'24.

South Korea and Japan were the other major importers from Australia in Jan-May'24. The latter supplied 20 mnt to South Korea, up by 2% y-o-y, while 19.3 mnt was shipped to Japan, down by 5%.

Shipper-wise performance

Rio Tinto's iron ore shipments were the highest at 118.6 mnt in Jan-May'24, down by 4% y-o-y against 123.4 mnt in Jan-May'23. BHP and FMG shipped 113 mnt and 80.5 mnt, respectively.

Port-wise exports

Port Hedland exported 220.4 mnt of iron ore in Jan-May'24, a climb up by 6% y-o-y compared to 208.4 mnt in Jan-May'23 followed by Walcott at 62.8 mnt, decreased by 10% y-o-y. Meanwhile, Port Dampier increased by 4% y-o-y to 55.8 mnt.

Price trends

Monthly average Australian Fe 62% iron ore prices in Jan-May'24 remained largely stable y-o-y at $119.8/t CFR China against $119.6/t in the same period last year.

Outlook

It is expected that the market will remain volatile in the coming months as monsoon is approaching near which will lead to reduce in iron ore export shipment.