Port Hedland Deckhands Approve Strike Action a Second Time
By Phoebe Sedgman and Jasmine Ng
July 23 (Bloomberg) — Tugboat deckhands at Australia’s Port Hedland approved industrial action for a second time this year amid a dispute over leave and wages, risking disruption to iron ore exports through the largest bulk export terminal.
Members of the Maritime Union of Australia approved an unlimited number of 2-hour and 4-hour stop-work meetings and unlimited work stoppages of 6 hours and 12 hours, the Fair Work Commission said today, citing the results of a ballot. The union represents deckhands at Teekay Shipping (Australia) Pty., which is contracted by BHP Billiton Ltd. to run tugboats in the port.
Strikes by workers, should industrial action happen, may slow exports by companies including Fortescue Metals Group Ltd. and BHP, which estimated that disruption may cost suppliers about A$100 million ($94.3 million) a day. Iron ore shipments through Port Hedland climbed to a record in May as output from mines expanded. Prices tumbled 29 percent this year amid forecasts for a widening global glut as supplies expand.
“There seems to be a lot of posturing by the unions, without a great deal of impact on volumes from the port to date,” said Ankit Pahuja, a Melbourne-based analyst at Australia & New Zealand Banking Group Ltd. Iron ore shipments from the port in June were 21 percent higher than the previous year despite the threat of strikes, he said by e-mail.
The Maritime Union of Australia previously approved unlimited stoppages of 24 hours, 48 hours and seven days on May 12, according to the commission. A union’s authority to take action lapses after a set period, requiring a fresh ballot of members to approve a continued mandate. The union, whose members work four weeks on then have four weeks off at present, is seeking four weeks’ annual leave and an increase in pay.
Two other unions that have staff at Port Hedland have also approved action at the facility, which is located about 1,300 kilometers (808 miles) north of Perth and handles output mined in the Pilbara, Australia’s biggest producing region.
The Australian Maritime Officers Union approved unlimited stoppages ranging from 2 hours to 72 hours, the commission said May 30. The Australian Institute of Marine and Power Engineers approved stoppages ranging from 4 hours to 48 hours, the commission said June 10. Both unions were granted 30-day extensions to the periods in which they could take action, documents on the commission’s website show.
Iron ore with 62 percent content delivered to the Chinese port of Tianjin fell 0.6 percent to $95.40 a dry ton yesterday, according to The Steel Index Ltd. Prices dropped to $89 on June 16, the lowest level since September 2012, the data show.
Iron ore exports from Port Hedland reached a record 36.1 million tons in May, data from the port authority show. Shipments to China also reached an all-time high that month and accounted for 83 percent of the total, the data show. BHP, Fortescue and Atlas Iron Ltd. ship through Port Hedland, while Rio Tinto Group exports through Cape Lambert and Dampier.
China’s total iron ore imports in the first six months of 2014 climbed 19 percent from a year earlier, customs data show. Australia’s share in the period rose to 56 percent from 50 percent, according to Bloomberg calculations based on the data.
The global surplus will climb to 83 million tons this year from a 12 million-ton deficit in 2013, Citigroup Inc. estimates. Shipments from Australia may climb to 680 million tons in 2014 from 579 million tons last year, the government said in June.
Copyright 2014 Bloomberg.
Sign up for our newsletter
Be the First
Join the 65,256 members that receive our newsletter.
Have a news tip? Let us know.