Port Hedland’s exports
It’s important for dry bulk investors to track the exports from Port Hedland because it’s the world’s largest bulk exporting port. More than 80% of the shipments from this port go to China. BHP Billiton (BLT) and Fortescue Metals Group (FSUGY) both ship from Port Hedland. Meanwhile, Rio Tinto (RIO) exports its ore from Cape Lambert and Dampier, located west of Port Hedland.
Export volumes at all-time high
Iron ore exports from Port Hedland totaled 38.4 million tons in June. In May, exports totaled 38 million tons. So that’s a jump of 14.3% YoY (year-over-year) and 1.1% month-over-month. It’s also a monthly export record, as you can see in the above graph. Based on the first six months of the year, exports are up 13% YoY.
Exports to China from this port also hit a record 32.6 million tons.
Impact on dry bulkers
Increased capacity among iron ore miners and displacement of Chinese domestic capacity should cause import volumes to climb in China. The imports will find their way to China and elsewhere through dry bulk shippers including Star Bulk Carriers (SBLK), Safe Bulkers (SB), Navios Maritime Holdings (NM), and Navios Maritime Partners (NMM).
Navios Holdings forms 1.9% of the Guggenheim Shipping ETF (SEA).
For broad exposure to this sector, consider the SPDR S&P Metals and Mining ETF (XME). XME invests in industries such as steel, coal and consumable fuels, gold, precious metals and minerals, aluminum, and diversified metals and mining.
Brazil is another major iron ore exporter. We’ll look at the progression of exports from Brazil in the next part of this series.