Port Hedland exports
Iron ore exports from Port Hedland—the world’s largest bulk exporting port—indicate the amount of iron ore that’s leaving Australia for China and other destinations. Port Hedland Port Authority releases these figures each month.
Shipments through Port Hedland accounted for 55% of Australia’s total iron ore exports in 2013. More than 80% of the shipments from this port go to China. Rio Tinto (RIO) ships iron ore out of Cape Lambert and Dampier.
On a per day basis, Port Hedland exported the most iron ore in February. It amounted to 1.27 million tons of iron ore shipments per day in February—compared to 1.19 million tons in January and 1.20 million tons the month before. The total shipments amounted to 35.7 million tons—compared to 36.8 million tons in January. Shipments have been quite strong as BHP Billiton and Fortescue Metals Group progress relentlessly on their path to drive low-cost producers out of the market by supplying low-cost iron ore.
Shipments to China totaled 30.3 million tons—compared to 30.1 million tons in January.
Recent production reports from companies—including BHP Billiton, Rio Tinto, and Fortescue Metals Group—show a massive ramping up of supply leading to increased exports. Meanwhile, this additional supply is one of the main contributors to decreasing iron ore prices.
The dramatic price collapse is having a negative impact on all of the iron ore players. However, the ones with lower scale and high debt—like Cliffs Natural Resources (CLF)—are hit more by the downturn.
To take a broader approach toward investing in this sector, you can look at the SPDR S&P Metals and Mining ETF (XME). Cliff Natural Resources forms 3.6% of XME’s holdings.