Iron ore shipments
Iron ore shipments from major ports in Australia and Brazil (EWZ) are key indicators for investors. They represent the supply side of the iron ore equation.
In this part of the series, we’ll discuss how shipments are shaping up for January 2017 and see how they’re expected to pan out going forward in 2017.
Iron ore exports remain strong
In January 2017, 40.3 million tons of iron ore were exported from Port Hedland. This amount was an impressive rise of 19% YoY (year-over-year), as compared to 33.8 million tons January 2016. The total shipments for 2016 reached a record 478.9 million tons—an annual rise of 7.4%.
Notably, major iron ore players BHP Billiton (BHP) (BBL), Fortescue Metals (FSUGY), Atlas Iron, and Rio Tinto (RIO) ship iron ore out of Cape Lambert and Dampier. Roy Hill, an iron ore project in Western Australia, started shipping iron ore in December 2015.
Meanwhile, iron ore exports from Brazil rose 15% YoY in January 2017 to 28.9 million tons.
More supply to pressure prices
Australia and Brazil are typically the lowest-cost iron ore producers. Rising exports from these destinations point to a robust low-cost supply. Investors should note that Vale (VALE) has started to ship volumes from its S11D project, which should boost export volumes.
Vale had already loaded 27,000 tons of iron ore as of January 20, 2017. And low-cost supplies and additional ore surely won’t bode well for iron ore prices going forward.
In the next part, let’s look at the iron ore inventory situation at Chinese ports.