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What Record Iron Ore Shipments from Port Hedland Mean for Prices

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Iron ore shipments

The data for shipments for iron ore from two key destinations, Australia and Brazil (EWZ), are an important supply-side factor to watch out for. Since these two countries contribute to the majority of the high-grade seaborne iron ore supply, it makes sense to keep a tab on shipments from these destinations.

According to the latest data released by the Pilbara Ports Authority, on January 9, iron ore shipments from Port Hedland for December 2017 reached a record high of 46.19 million tons, which also implies growth of 5.1% year-over-year (or YoY) and 11.7% sequentially. Shipments from Port Hedland in 2017 totaled 419.5 million tons, growth of 5% YoY.

Port Hedland is Australia’s largest iron ore–loading port. This port is used by three miners—BHP (BHP), Hancock Prospecting, and Fortescue Metals Group (FSUGY). Rio Tinto (RIO), on the other hand, uses Port Dampier.

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Shipments from Brazil

While the exports from Port Hedland hit a record high in December, volumes shipped from Brazil fell in December by 6.7% YoY to 32.78 million tons. In 2017, shipments rose 2.6% to 383.4 million tons. Exports of iron ore from Brazil have been increasing yearly since 2013. China is the main destination for the bulk of Brazil’s iron ore exports, forming 54% of the total exports in 2017.

More supply going forward

Apart from monthly irregularities, iron ore exports from Australia and Brazil have been on the rise. Many miners in these countries are still ramping up.

Roy Hill in Australia and Vale SA (VALE) in Brazil are still in their ramp-up phases. This ramping up should lead to additional volumes in the coming one to two years.

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