Australia: Iron ore export shipments up y-o-y in 9MCY'24

Australia's iron ore and pellet export shipments marginally increased by 2% y-o-y to 644 million tonnes (mnt) in 9MCY'24 (Jan-Sep 2024) compared to 629 mnt in 9MCY'23 (Jan-Sep 2023) , as per vessel line-up data maintained with BigMint.

The year started with disruptions due to heavy rains in February, which affected mining and logistics operations. However, as weather conditions improved, mining activities rebounded, leading to higher shipments in subsequent months. A m-o-m rise of 3% was recorded in September, with shipments reaching 75.9 mnt, up from 73.5 mnt in August 2024.

The demand for Australian iron ore was significantly boosted by increased steel production in Southeast Asian countries, particularly Indonesia and Vietnam, which expanded their blast furnace capacities. This rise in steel output drove up the demand for raw materials like iron ore, contributing to the higher export volumes.

Positive macroeconomic developments also played a role in supporting the iron ore market. The US Federal Reserve's decision in mid-September to cut interest rates for the first time in four years improved global market sentiment, enhancing trading activity. Additionally, the resumption of steel production in northern China contributed to a favorable outlook, further boosting Australia's iron ore exports.

Exports to China rise in 9MCY'24

Australia's iron ore exports to the world's largest importer, China, were recorded at 541 mnt in 9MCY24, an increase of 2% y-o-y against 529 mnt in 9MCY'23. Meanwhile, exports rose by 4% m-o-m to 65 mnt in September as against 62.4 mnt in August.

The consistent supply of medium-grade fines and improvement in steel product prices have supported the iron ore exports. Additionally, the approaching end of hot weather in China is expected to boost construction activity, further supporting demand and iron ore import.

South Korea and Japan were the other major importers from Australia. The latter supplied 37.6 mnt to South Korea, down by 3% y-o-y, while 37 mnt was shipped to Japan, largely stable as compared to the same period of last year.

Shipper-wise performance

Rio Tinto's iron ore shipments were the highest at 225.1 mnt in 9MCY'24, down by 2% y-o-y against 229.3 mnt in 9MCY'23. BHP and FMG shipped 207.1 mnt and 152.5 mnt, respectively.

Port-wise exports

Port Hedland exported 406 mnt of iron ore in 9MCY24, up 5% y-o-y compared to 385 mnt in 9MCY'23 followed by Walcott at 121 mnt, down 8% y-o-y. Meanwhile, Port Dampier increased shipments by 6% y-o-y to 104.1 mnt.

Price trends

Monthly average Australian Fe 62% iron ore prices in 9MCY'24 dropped by $4/t y-o-y to $112/t CFR China against $117/t in the same period of last year amid the increasing inventory level and the seriousness of the country's economic issues.

Outlook

Australia's iron ore export shipments are expected to increase in the coming months supported by strong demand from China, particularly for low and medium-grade ores as Chinese steel margins remain under pressure and The recent rate cut by the US Federal Reserve and improving global market sentiment could further boost trade activity.