Roy Hill Says First Iron Cargo of 2016 to Depart in Near Futureby
Roy Hill Holdings Pty is gearing up for its third iron ore shipment from Australia, the first this year from the $10 billion project backed by billionaire Gina Rinehart that will contribute to expanded global supplies.
“Roy Hill expects to make its third shipment in the near future,” Bill Hart, the company’s spokesman, said on Friday in an e-mailed response to questions, without giving a specific date or period. “During January, commissioning and completion of outstanding works has continued by” Roy Hill’s contractor Samsung C&T Corp., Hart said.
The global market is set to absorb a further jump in supply this year after prices sank amid a global surplus, with the largest miners including Vale SA, Rio Tinto Group, BHP Billiton Ltd. pressing on with expansions to defend market share. Roy Hill has pushed back against suggestions the start of shipments from its 55-million-ton-a-year project would further hurt prices, saying most new output won’t be sold for immediate delivery. After a delay, the first two cargoes were dispatched last month as price fell to a multi-year low.
Hart’s comments followed a report from Sanford C. Bernstein & Co. on Thursday that said that since Roy Hill’s first two cargoes departed from Port Hedland, no further shipping activity from the company had been seen. Bernstein’s weekly report tracks iron ore cargoes worldwide from all major producers.
Iron ore with 62 percent content delivered to the Chinese port of Qingdao was at $41.29 a dry ton on Thursday, according to Metal Bulletin Ltd. The commodity touched $38.30 on Dec. 11, the lowest in daily prices dating back to May 2009. On Friday, futures prices advanced in Asia on potential disruption to shipments from Vale in Brazil.
Almost 90 percent of output from the mine in Western Australia’s Pilbara region is under long-term contract, including more than half earmarked for partners outside China, Roy Hill has said. The Australian government forecasts that the country’s exports will increase to 868 million tons this year from 767 million tons in 2015.