IRON ORE exports from Port Hedland, Australia – the world’s largest iron ore port – hit a record high in June 2015 as global prices continue to fall.
NEGOTIATOR’S TAKE: More downward pressure on steel prices, especially in China.
Figures released by the Pilbara Ports Authority show iron ore exports in June rose 14 per cent to 38.3 million tonnes compared to the same month a year earlier. Exports of the steelmaking commodity have increased 21 per cent in the past year, totalling 439.6 million tonnes.
The surge in exports to China comes as the world’s largest iron ore miners continue to be accused of flooding the market and driving prices lower. The iron ore price fell six per cent to around $US55 overnight after dropping through the $US60 barrier earlier in the week.
Many analysts believe the price of Australia’s biggest export earner will again fall below $US50 a tonne because of a global oversupply. The price falls have almost sent some high-cost junior Pilbara producers such as Atlas Iron to the wall. Atlas, which has a $US50 a tonne break-even price, has now re-opened all three of its Pilbara mines after suspending all mining and trading in its shares in April. The company was losing money when the iron ore price plunged to decade lows below $US50 a tonne, but it has since responded by striking a profit sharing, cost cutting deal with its contractors.
Meanwhile, the big iron ore miners appear determined to push on with increasing output, with Sam Walsh, the head of Rio Tinto on Wednesday saying it was important for the company’s 10-year Pilbara expansion to come to fruition.
While some high cost producers would be forced to shut down, the current downturn was sowing the seeds for the next recovery, he said.
Shares in all of Australia’s Pilbara iron ore miners were under pressure on Friday amid wider market losses.
Originally published as Pilbara iron exports up, price drops again.
Source: newscom.au Supplied