Australia: Iron ore export shipments recover by 33% m-o-m in Mar'24

Australia's iron ore and pellet export shipments climbed by 33% m-o-m to 76.3 million tonnes (mnt) in March 2024 compared to 57.5 mnt in February, as per vessel line-up data maintained with BigMint. However, owing to heavy rain in the February, 2024 which impacted the iron ore shipment from Australia though in March all major suppliers push to maximise volumes towards the cyclone season end. Meanwhile, shipments rose by 8% y-o-y to 76.3 mnt in March, 2024 compared to 70.8 mnt in March, 2023.

Exports to China up by 34%

Australia's iron ore exports to the world's largest importer, China, were recorded at 64.8 mnt in March, increased by 34% m-o-m against 48.2 mnt in February.

South Korea and Japan were the other major importers from Australia in March after China. They had supplied 4.3 mnt to South Korea, jumped by 43% m-o-m, while 4.1 mnt were shipped to Japan, up 22%.

Shipper-wise performance

Rio Tinto's iron ore shipments were the highest at 26.8 mnt in March, up by 38% m-o-m against 19.4 mnt in February. BHP and FMG shipped 23.5 mnt and 18.2 mnt, respectively.

Port-wise exports

Port Hedland exported 48.2 mnt of iron ore in March, up by 32% m-o-m compared to 36.5 mnt in February followed by Port Walcott at 13.7 mnt, rose by 30% m-o-m. Meanwhile, Port Dampier increased by 47% m-o-m to 13 mnt.

Price trends

Iron ore export shipments from Australia witnessed a rise in March as the low-grade iron ore demand from Chinese steel mills improved. Prices fell to a 9-month low in March following a rapid increase of Chinese iron ore inventory at the port side. *Iron ore ports inventory in China increased to over 142 mnt in March, 2024 end against 135 mnt levels seen in end-February, 2024*.

Monthly average Australian Fe 62% iron ore prices sharply fell by $16/t m-o-m to $110/t CFR China in March against $126/t a month ago.

Outlook

Iron ore shipments may be expected to remain volatile in the coming month following high iron ore inventory at port amid sluggish demand in the domestic Chinese market. Reports indicate that the Ministry of Industry and Information Technology intends to organise a symposium involving major steel companies such as Baowu Group, Anshan Iron and Steel Group, Shougang Group, and Hegang Group. The objective is to delve into the challenges and underlying issues hindering the steel industry's development, aiming to facilitate its smooth operation and sustainable growth.

In summary, despite a wave of positive developments, the present market sentiment has markedly improved compared to March, and there's a notable uptick in macroeconomic prospects. Nevertheless, the overall steel prices are experiencing a restrained recovery due to persistent weaknesses in both supply and demand dynamics. Looking ahead, our focus remains on potential macroeconomic stimuli and demand resurgence.

*Correction: The China ports inventory comparisons has been corrected which was previously compared between January and February month.