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By Krystal Chia and Shery Ahn (Bloomberg) –Iron ore exports from Australia’s Port Hedland, the largest bulk-export terminal, are expected to hit a record as producers in the nation’s mining heartland raise output, according to the Pilbara Ports Authority.
Cargoes of the steelmaking material shipped via Hedland may swell to a new high in the fiscal year to June 2020, and over this calendar year may beat 2018’s total, Chief Executive Officer Roger Johnston said in an interview. Last year, iron ore volumes were 508.5 million tons, with most going to China.
Global flows of seaborne iron ore have been picking up in recent months after disruptions in the first half in Brazil and Australia, with Hedland posting a record volume for the month of August. That’s contributing to downward pressure on prices amid concern the worldwide market may shift to a surplus, and many banks have forecast further weakness into 2020.
“There are no impediments to miners in the Pilbara meeting targets that they’ve put up, and if you look at their collective targets, they are ahead of last year’s,” said Johnston, who spoke to Bloomberg Television and in a separate interview. On a calendar-year basis, exports may “just get ahead” of last year, barring natural events such as cyclones, he said.
Port Hedland in Western Australia handles material from companies including BHP Group, the world’s largest miner, as well as Fortescue Metals Group Ltd. and Roy Hill Holdings Pty. BHP has forecast that iron ore output may rise as much as 6% in the year through June 30.
In the first nine months of this calendar year, Hedland’s volumes totaled 382.8 million tons, narrowly behind 2018’s pace for the same period. In March, Cyclone Veronica hit Western Australia, affecting ports, miners and shipments.
Iron ore retreated on Wednesday, with the most-active contract in Singapore losing as much as 1.5% to $82.60 a ton before trading at $83.31 in the mid-afternoon. In Dalian, futures eased for a third straight day.
In other remarks, Johnston said:
NOTE: The authority encompasses three ports– the Port of Port Hedland, the Port of Dampier — which is used by Rio Tinto Group — and the Port of Ashburton, according to its website.
–With assistance from Anand Menon.
© 2019 Bloomberg L.P
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