Article by Jo Clarke courtesy of Argus Media.
Shipments from the four largest iron ore producers in the Pilbara region of Western Australia (WA) rebounded by over 2mn t in the week to 4 September, as Rio Tinto pushed to hit the bottom of its 2021 guidance and BHP found some work-arounds at its Port Hedland export facility.
The four largest WA producers — Rio Tinto, BHP, Fortescue and Roy Hill — loaded vessels with a combined 18.57mn deadweight tonnes (dwt) of capacity in the latest week, up from 16.47mn dwt in the week to 28 August and 9pc above 12-month average levels. Prices continued to slide on lower Chinese pig iron production.
Rio Tinto loaded ships with 7.35mn dwt capacity in the latest week, up from 6.54mn dwt in the week to 28 August and 12pc above its rolling average of 6.59mn dwt/week. The firm will meet the bottom of its 2021 target of 325mn-340mn t on a 100pc basis if it continues at this rate for the rest of this year, but it has achieved this rate only twice since mid-May. Rio Tinto is likely to miss its guidance by 5mn-10mn t because of supply-side problems and easing of demand, particularly from China, according to Swiss bank UBS.
BHP has found some work-arounds that allow it to increase output while continuing maintenance on its Nelson Point No.1 car dumper at Port Hedland, which is scheduled to extend into October. BHP loaded ships with 6.09mn dwt capacity in the week to 4 September, up from 5.05mn dwt the week before and 7pc above its annual rolling average of 5.71mn dwt/week. This was the most the firm has shipped in a week since the last week in June and reflects more tonnage through Nelson Point than in prior weeks.
Fortescue’s shipments rose to 4.15mn dwt from 3.72mn dwt the previous week and to the highest level since June, when it was pushing output ahead of the end of its financial year on 30 June. The firm’s exports were 16pc above its average of 3.57mn dwt.
Roy Hill loaded ships with 980,000dwt capacity in the week to 4 September, down from 1.16mn dwt the previous week and 14pc below its rolling average of 1.14mn dwt/week.
China was listed as the destination for 78pc of shipments in the latest week, down from 81pc a week earlier. After including shipments with unconfirmed destinations — most of which are probably headed to China — the percentage was 84pc, up from 83pc a week earlier and above the recent average of around 82pc.
Argus assessed the ICX 62pc Fe at $131.75/dmt cfr Qingdao on 6 September, down from $220.70 on 1 July and a high of $235.55/dmt on 12 May. Argus also last assessed the 58pc Fe grade at $103/dmt cfr Qingdao on 6 September, down from $182.55/dmt on 1 July and a high of $207.10/t on 12 May.