Exports from Australia’s largest terminal have reached record breaking levels in May as iron ore shipments from Port Hedland jumped to 36.1 million metric tons from 27.9 million tons in May 2013, data on the port authority’s website showed yesterday.
According to the article on Bloomberg, the increase in shipments comes as major iron ore producers are boosting output from low-cost mines to offset declining prices, which capped a sixth monthly drop in May.
“Miners are lifting output,” said Justin Smirk, a senior economist at Westpac Banking Corp. in Sydney.
“As long as iron ore remains at a price where miners can deliver it at a profit, it may be a shrinking profit, but if they’re still making money they’ll keep” producing, he said.
However, the increase in output has also contributed to pushing benchmark prices to the lowest level since 2012, and miners fear the slide could continue over the next year.
Prices have slumped 30 % this year, reaching $91.80 on 30 May, and according to Fortescue Chairman Andrew Forrest, could drop to as low as $80 or rise as high at $140 over the next 12 months.
Iron ore exports from Port Hedland, in the first five months of the year, totalled 161.3 million tons, 34 higher than the same period in 2013.
“Our miners are exporting their socks off and thank God because it’s having an impact, a positive impact, on our economy,” Treasurer Joe Hockey told reporters in Canberra yesterday.
“Growth has been driven unquestionably by net exports. But what we found over this March quarter, it’s an extraordinary quarter in March when you don’t have cyclones, particularly in Western Australia affecting Port Hedland.”
Meanwhile, the possibility of strike at the port persists, as Tugboat workers have approved work stoppages at Port Hedland, risking disruptions which could cost major miners as much as $100 million a day.
The Australian Maritime Officers Union and the Maritime Union of Australia have approved strikes against Teekay Shipping (Australia) Pty in Port Hedland. A third union, the Australian Institute of Marine and Power Engineers is balloting members and expects results from its workers on 10 June.