Australia: Iron ore exports drop nearly 15% in Feb'23

Australia's iron ore and pellet export shipments decreased by 14.6% m-o-m to 62 million tonnes (mnt) in February 2023 compared to 72.58 mnt in January, as per vessel line-up data maintained with SteelMint.

Exports to China down 13%

Australia's iron ore exports to the world's largest importer, China, were recorded at 53.52 mnt in February, down 12.7% m-o-m against 61.28 mnt in January. Iron ore exports fromaustraustralia Australia to China fell in February because of poor liquidity and low seaborne buying interest.

Japan and South Korea were the second- and third-largest iron ore importers from Australia in February. The latter supplied 3.30 mnt to Japan, down 17% m-o-m, while 3.22 mnt was shipped to South Korea, down 26% m-o-m.

Shipper-wise performance

Rio Tinto's iron ore shipments were the highest at 22.93 mnt in February, down 6.2% m-o-m against 24.46 mnt in the previous month. BHP and FMG shipped 17.88 mnt (down 26%) and 15.04 mnt (down 2%), respectively.

Exports from Port Hedland

Port Hedland exported 37.4 mnt of iron ore in February, down 19% m-o-m compared to 46.38 mnt in January followed by Port Walcott at 11.6 mnt (largely stable m-o-m) and Port Dampier at 11.3 mnt (down 11% on-month).

Price trends

Monthly average Australian Fe62% iron ore prices stood at $126/t CFR China in February compared to $123/t in the previous month. In January, once China's economy resumed after lifting of Covid curbs, iron ore prices increased by 10%. Industrial and construction activity resumed, which led to an upsurge in steel demand.

This was an extension of a movement that had started in November after China loosened its Covid limitations and eventually abandoned its zero-Cvoid policy in December.

Outlook

Australia's iron ore exports are expected to remain volatile amid uncertain Chinese policy. However, low-grade demand is still decent as margins of Chinese steel mills are on the lower side.