- Rio, Vale increase shipments in first quarter from year ago
- Rinehart's Roy Hill project in the Pilbara is now ramping up
Iron ore shipments by the world’s largest producers expanded 10 percent in the first three months of 2016 compared with the same period last year, according to Sanford C. Bernstein & Co., which said it expected production to be strong this year.
Combined exports from miners including Rio Tinto Group in Australia and Brazil’s Vale SA totaled an estimated 270 million metric tons in the first quarter, about 10 percent more than the same period last year, Bernstein said in a weekly cargo-tracking report that tallies figures on a ship-by-ship basis. The increase in the period was supported by initial shipments from Gina Rinehart’s Roy Hill mine in the Pilbara.
While iron ore has rebounded this year, confounding analysts forecasting a fourth year of losses, the figures from Bernstein show that some top producers have continued to raise low-cost supply to defend market share amid a slowdown in China, the world’s largest buyer. Data this week showed exports from Australia’s Port Hedland, the world’s biggest bulk-export terminal, soared to a record in March as port holdings in China surged back toward 100 million tons after expanding for three quarters.
‘Will Be Strong’
“We have no doubt that production will be strong this year,” senior analyst Paul Gait wrote in the report on Thursday. “Roy Hill now seems to be starting to gather some momentum,” with another new ship observed at the berths this week, which should depart within the next few days, he said.
Shipments in the first quarter were 8.1 percent lower than in the final three months of 2015, Bernstein said, describing the on-quarter drop as in line with seasonal expectations with slower construction activity in China, where many businesses closed for the Lunar New Year break.
Ore with 62 percent content delivered to Qingdao port in China lost 0.3 percent to $54.57 a dry ton on Wednesday to head for a third weekly loss, the longest since December, according to Metal Bulletin Ltd. Prices jumped 23 percent in the first three months after a 39 percent slump last year and 47 percent slump in 2014.