Iron ore exports to China from Australia’s Port Hedland declined from an all-time high last month amid record stockpiles at ports in the world’s largest buyer of the steel-making raw material.
Shipments from the world’s biggest bulk export port to China were 29.2 million metric tons from the record 29.9 million tons in May and 22.9 million tons a year earlier, data on the port authority’s website showed today. Total shipments were 33.6 million tons from a record 36.1 million tons in May and 27.7 million tons in June 2013, the data show.
Iron ore fell 29 percent this year as producers in the largest shipper including BHP Billiton Ltd. expanded supplies, betting that increased volumes from their low-cost mines will more than offset declining prices. Stockpiles at ports in China reached a record in June and provided buyers with a quick source of supply, according to Morgan Stanley.
“Overall demand from China is not that strong because port inventory is still very high,” Helen Lau, a Hong Kong-based analyst with UOB Kay Hian Ltd., said by phone.
The stockpiles at ports fell 1.3 percent to 105.72 million tons in the week ended June 27, according Beijing Antaike Information Development Co. The reserves reached a record 107.08 million tons in the week to June 20, the data show.
Stockpiles assure consumers of supply should they choose not to negotiate in the seaborne market, turning so-called pricing power in the favor of the buyer, Morgan Stanley said June 12. Miners in China are cutting production as cheaper overseas supplies increase, and a mainland mine shuts every day, Citigroup Inc. analyst Ivan Szpakowski said last month.
Iron ore with 62 percent content delivered to the Chinese port of Tianjin rose 0.5 percent to $94.70 a dry ton yesterday, according to The Steel Index Ltd. While prices dropped to $89 on June 16, the lowest since September 2012, they climbed 2.2 percent that month, rising for the first time since November.