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Monday, 5 May 2014

Port Hedland shatters cargo record (again)

China's non-manufacturing PMI in April was 54.8 (above 50 denotes expansion) which was a new 5 month high.

In that context it was interesting to see the latest news from the Pilbara, with Port Hedland iron exports crunching out another huge record result for the last last month despite talk of weather interruptions.

"Iron ore exports to China from Australia’s Port Hedland surged to a record in April as stockpiles in the biggest buyer reached an all-time high.

Shipments from the world’s largest bulk export terminal totaled 28.9 million metric tons last month compared with 27 million tons in March and 19.3 million tons a year earlier, data on the port authority’s website show. Total exports were also a record 34.8 million tons last month, up from 34.4 million tons in March and 26 million tons in April 2013, the data show.
Total shipments from Australia, the world’s largest exporter, will rise 19 percent to a record 687 million tons this year, the Bureau of Resources and Energy Economics estimates, as miners including Rio Tinto Group (RIO) and Fortescue Metals Group Ltd. boost output."
Numbers on a page don't tell much of a story.

But if we chart the figures back to October 2012, this should give a picture of (a) the huge ramp up in volumes that is taking place and (b) the massive reliance on demand from China (and its province Taiwan), and to a lesser extent Korea and Japan. 
Due to it being a province of China, I've just lumped the Taiwan numbers in with China below (for the record the Taiwan share of exports shipped for the month was around 787,000 tonnes). 

The rest of the iron ore cargo, some of which is shipped within Australia, is peanuts. The ramp up in volumes is vast (click chart):

Total iron ore shipments from Port Hedland have leapt by 34% on a year ago.

For a little bit of context, on the same month in 2006, Port Hedland shipped only 8.7 million tonnes of iron ore and only 5.4 million tonnes of that to China.

Australia is rapidly transitioning from mining construction to mining production.

Watch out for the RBA's updated Chart Pack this week: it's going to show iron ore bulk commodity exports spiralling off the chart.

Bulk Commodity Exports graph

Even these figures don't really do the Port Hedland ops justice. There is only one way to really get a handle on what's going on up there, in the Pilbara, and that's to go for a visit. Only one word for it: awesome.