Iron Ore Exports Hit Record as Barclays, Goldman Spar on Outlook

LAGOS (Capital Markets in Africa) – The global iron ore industry got off to a very strong start in 2018 with record exports from key shippers just as Barclays Plc and Goldman Sachs Group Inc. duel about whether high prices will last amid a debate about prospects for demand in China and rising mine supply.

Exports from Australia’s Port Hedland were 41.1 million metric tons in January, according to the Pilbara Ports Authority. That’s a record for the month, even after bad weather forced a short closure. Flows in December were 46.2 million tons. Last week, Brazil also reported its biggest ever shipments for January.

Iron ore capped a wild 2017 by surging into a bull market, aiding producers including BHP Billiton Ltd. — which ships cargoes via Port Hedland — as China’s steel supply curbs stoked demand for higher-grade, more efficient iron ore and mills enjoyed rising profitability. While Barclays said in January that the commodity’s set to tank as mills’ margins recede, Goldman Sachs predicts that prices may rally to as much as $85 a ton within three months.

Spot ore with 62 percent iron content in Qingdao was at $75.70 a dry ton on Monday, 4.3 percent higher this year, according to Metal Bulletin Ltd. Iron ore futures in Singapore gyrated on Tuesday as investors weighed the impact of the selloff in global equities.

Port Hedland is the main maritime gateway to the Pilbara, the center of Australia’s iron ore industry, and the terminal handles cargoes from miners including BHP, Fortescue Metals Group Ltd. and Gina Rinehart’s Roy Hill project. Exports to China were 34.7 million in January, little changed from a year ago.

Source: Bloomberg Business News