Australian iron ore exports have made a strong start to 2022 at the right time – just as Brazil’s shipments were being hit by heavy rain and bad weather.
Exports through Port Hedland in January, the world’s biggest port, had the strongest start to a year in more than five years.
Total iron ore exports through Port Hedland jumped 14% to just on 48 million tonnes, while shipments to China were also up 14% to 40.5 million tonnes.
Usually bad weather in the shape of cyclones, intense tropical lows or the heavy rain associated with them disrupt iron ore exports from the Pilbara mines of BHP, Rio Tinto, Fortescue and the likes of Roy Hill January-through March.
This January saw no disruptions except from labour shortages caused by Covid lockdowns and border closures creating labour shortages.
Shipments from Port Hedland though were 6% lower in January than December’s 50.8 million tonnes, while exports to China eased 4% as steel mills still chased Australian tonnes ahead of the Lunar New Year break at the start of February to make up for less tonnes (well over 2 million) from Brazil.
The strong performance at Port Hedland is in stark contrast to that of Brazil where exports fell nearly 13% to 25.21 million tonnes, compared with 28.93 million tonnes in January, 2021. Exports were also down around 20% from the 31.43 million tonnes exported in December.
The fall was due to the country’s southeastern region (mostly mines owned by Vale) affected by heavy rain. Vale said the rain cost it 2 million tonnes of missed exports in January alone.
Vale’s 4th quarter figures showed the impact of heavy rains in late December in the company’s northern mines (where its high grade, 65% Fe fines product comes from.
Vale reported production of a disappointing 82.47 million tonnes of ore in the three months. (That compares to the 84.1 million tonnes for Rio Tinto in the final quarter of 2021.)
Vale’s shipments totalled 83.14 million tonnes, still just behind Rio Tinto’s 84.1 million tonnes.
For the year Vale produced 315.6 million tonnes, Rio topped that with 319.7 million. Vale’s production rose 15.2 million tonnes, Rio’s fell 4%.
Rio’s 2021 sales fell 3% to 321.6 million, Vale’s jumped 23.7 million tonnes to 305.8 million tonnes.
Vale’s production figures are misleading though – the 315 million annual figure and the 82 million December quarter figures includes third party sales, and more importantly, tens of millions of dollars of lower grade ore that the company then converts to pellets (32.3 million tonnes in 2021, up slightly from 31.2 million in 2020).
On a strictly comparable basis, iron ore produced solely for export by Vale as fines or lump jumped 22.6% to 277.5 million tonnes from 254.8 million tonnes in 2020.
By that measure, Rio remains clearly ahead of Vale.
