Australian Storm Seen Building as It Nears Biggest Iron-Ore Port

A storm off Australia will approach the world’s biggest port for exporting iron ore with a category 4 rating, the second-most-destructive, according to the Bureau of Meteorology.

Severe Tropical Cyclone Rusty, now a category 3 storm about 125 kilometers (78 miles) northeast of Port Hedland, will increase in intensity and reach category 4 by 5 a.m. local time tomorrow, the bureau said in an update. Winds at the storm’s center are already at speeds of 205 kilometers an hour, it said.

BHP Billiton Ltd., Fortescue Metals Group Ltd. and Atlas Iron Ltd. export the ore, a steelmaking raw material, via terminals at Port Hedland. Shipments totaled 238.9 million metric tons for the year through June, according to the Port Hedland Port Authority. Global trade of iron ore by sea will come to 1.2 billion tons this year, according to Clarkson Plc, the largest shipbroker.

“This is a large tropical cyclone and its slow movement is likely to result in an extended period of destructive winds near the track, with rainfall that is heavier than that associated with a typical system,” the bureau said. It also predicted “major” flooding.

Ore shipments will fall by about 5 million tons, or about 5 percent of global volume, tightening supply into March, Melinda Moore, a London-based bulk-commodity sales executive at Standard Bank Plc, said in an e-mailed report today.

“We are assuming minimal damage to inland mining facilities at this stage, with only a few days of reducing activities, with safety key,” Moore said.

To contact the reporter on this story: Michelle Wiese Bockmann in London at mwiesebockma@bloomberg.net

To contact the editor responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net

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