Iron ore sales to China from Australia’s Port Hedland climbed 27 percent in January from a year earlier as miners increased output and the biggest buyer boosted inventories to the highest level in 16 months.
Cargoes from the world’s largest ore-export terminal to China totaled 23.3 million metric tons last month from 18.4 million tons a year ago, data on the port’s website showed. Shipments, which reached a record 25.2 million tons in October, were 24.2 million tons in December. Total iron ore exports were 28.2 million tons from a record 29.5 million tons in December and 22.1 million tons a year earlier, the data showed.
Steelmakers in the world’s second-biggest economy purchased a record amount of ore in 2013 even as growth slowed. The global ore market remains undersupplied and will shift to a modest surplus only in the second half, according to Morgan Stanley. Prices, which fell last month, may decline further as supply expands, according to Goldman Sachs Group Inc.
“It’s down month-on-month, which reflects seasonal weakness with winter in China and some wet-season issues in the Pilbara,” said Tom Price, an analyst at UBS AG in Sydney. Exports rose “year-on-year because we just had a whole bunch of projects come into the market in 2013, mostly the second half, by Rio and Fortescue. The whole trade flow has expanded but it still has the seasonal character built into it.”
Fortescue Metals Group Ltd., Australia’s third-largest iron ore exporter, is boosting capacity to 155 million tons by the end of March. The Pilbara is the country’s principal ore-producing region.
Rio Tinto Group, the world’s second-largest mining company, said last month that production rose 7 percent to 55.5 million tons last quarter from 52 million tons a year earlier. The company in November approved an expansion of its annual iron ore output capacity to 360 million tons by 2017.
Stockpiles at Chinese ports climbed to 89.78 million tons in the week to Jan. 24, the highest since Sept. 28, 2012, according to Beijing Antaike Information Development Co. Imports expanded 10 percent to 820 million tons in 2013 from a year earlier, according to the customs administration.
Iron ore with 62 percent content delivered to the Chinese port of Tianjin was at $122.60 a dry ton yesterday, according to The Steel Index Ltd. Prices dropped 8.6 percent last month, the biggest decline since May.