Port Hedland’s 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. The Port Hedland Port Authority releases these figures each month.
More than 80% of the shipments from this port go to China. Rio Tinto (RIO) ships iron ore out of Cape Lambert and Dampier.
Export volumes drop
Iron ore exports from Port Hedland totaled 35.4 million tons in April—compared to 36.6 million tons in March 2015. The drop in shipments to China was the main reason behind the overall decline. Shipments to China fell by 3.6% month-over-month to 30.1 million tons.
Export volumes to Japan also declined, while exports to South Korea increased month-over-month.
China’s iron ore consumption
China consumes two-thirds of seaborne iron ore. Therefore, any uptick or weakness in Chinese demand mainly impacts iron ore companies that conduct seaborne trade. Weakness in Chinese demand caused iron ore prices to touch a ten-year low of $47.08 per ton in April. These price levels led Atlas Iron to shut down its Pilbara operations.
To take a broader approach towards investing in this sector, you can look at the SPDR S&P Metals and Mining ETF (XME). Cliffs Natural Resources forms 3.6% of XME’s holdings.
Brazil is another major exporter of iron ore. In the next part of this series, we’ll see how exports from Brazil did in April.