UPDATE: Port Hedland China Ore Exports Down 11.5% In August
September 07 2009 - 11:20PM
Dow Jones News
Iron ore shipments to China from Port Hedland in Western
Australia fell 11.5% in August, said the port authority Tuesday,
signaling a possible cooling of demand from the world's biggest
importer of the steelmaking ingredient.
It may also reflect China's attempt to curtail its reliance on
Australian iron ore in light of the proposed production joint
venture between major exporters Rio Tinto Ltd. (RIO.AU) and BHP
Billiton Ltd. (BHP.AU), analysts say.
Mark Pervan, senior commodities strategist with ANZ, says China
has been sourcing more ore from Brazil of late.
"They may be trying to dilute somewhat their reliance on a
BHP-Rio tie-up," Pervan told Dow Jones Newswires.
While still heavily dependent on Australian ore, China is
"tweaking" its imports by "taking a higher proportion from Brazil
and supplementing it with lower-grade ore from South Africa",
Pervan said.
The lower Port Hedland shipments may also reflect a cooling of
the Chinese spot market in the past month or so, Pervan said.
Rio Tinto, which doesn't export from Port Hedland, said Friday
that Chinese spot prices have slumped to around US$80 a ton, from
more than US$100 early last month.
The price fall mirrors recent declines in Chinese steel prices,
said Rio iron ore chief executive Sam Walsh.
Rio and BHP are committed to have their joint venture in place
by the middle of 2010, Walsh said, but denied that this will reduce
competition in the iron ore market.
Port Hedland in Western Australia's Pilbara region is BHP's key
Australian iron ore port, while Rio exports from the Pilbara go
through ports at Dampier and Cape Lambert.
Despite the Chinese dip, Port Hedland's overall iron ore exports
rose 2% in August to 14.22 million metric tons, according to an
update on the Port Hedland Authority's website Tuesday.
The total included 9.82 million tons moved to China, down from
11.1 million tons in July.
China's slump was more than compensated by shipments to South
Korea, a traditional customer of BHP, which saw its exports nearly
triple to 2.11 million tons.
A BHP spokesman declined to comment on the figures, saying the
company will make a statement in its next quarterly production
report, due next month.
Fortescue Metals Executive Director Graeme Rowley said he is
unsure why Chinese exports fell.
"All I know is that we achieved our targeted tons (for August),
so if there has been a drop it comes from other sources, not from
ourselves," he told Dow Jones Newswires.
Fortescue, which ships only to China, is seeking to ramp up its
Pilbara production to a rate of 45 million tons a year by the first
half of 2010.
-By Stephen Bell, contributing to Dow Jones Newswires;
61-8-9244-4243; sgbell@bigpond.com