Iron ore exports from major producers improved in May, but most miners will need to lift run rates over the second half of 2021 to meet their sales guidance, according to analysis using S&P Global Platts’ tradeflow software, cFlow, by Platts Analytics.
Shipments from Rio Tinto, BHP, Vale, Fortescue Metals Group and Roy Hill, and Saldanha port in South Africa, reached 99.41 million mt in May, the highest level so far this year, up 7.8% month on month and a 3% increase year on year.
This took January-May exports to 465.01 million mt, up 1.7% on year, according to cFlow. June is normally one of the strongest months of the year for shipment volumes as the Australian financial year ends on June 30. BHP and Fortescue will want to optimize revenues and achieve full-year sales guidance before closing the book on the year, while Rio Tinto and Vale – which use a calendar financial year – will want to post solid first-half results. A strong June is usually followed by a weaker July due to producers needing to rebuild stocks.
The data should be used as an indication only and may not capture all vessel movements and volumes.
The generally weak export performance this year, coupled with strong steel production in China, has resulted in tight supply of mainstream medium-grade fines. This has helped keep the Platts 62% Fe benchmark at high levels, averaging $205.70/mt CFR in May and reaching $217/mt on June 10.
Individual producer performance
** Rio Tinto shipped 26.4 million mt from Port Dampier and Cape Lambert in May, up 8.8% on month but down 4.7% on year. Its exports totaled 128.86 million mt over January-May, down 2.4% on year. The company has been carrying out some maintenance work which should end mid-June, but it is expected to have a small impact on shipment levels. The annualized export run rate over January-May was 311.5 million mt, and the miner is targeting 325 million-340 million mt for the full 2021 year.
** BHP’s shipments rose 5.7% on month in May but fell 0.9% on year to 25.51 million mt. This took its shipments to 116.68 million mt over the first five months of this year, a drop of 3% on year. BHP exported 261.32 million mt over July 2020 to May 2021, accounting for around 95% of its guidance for the 2021 financial year of 276 million-286 million mt.
** Vale’s estimated seaborne exports from Brazilian ports in May totaled 23.26 million mt, up 14.8% on month and 22.7% on year. This took January-May volumes to 104.14 million mt, up 13.4%. Vale said its iron ore production would be 315 million-335 million mt in 2021. Over January-May, Vale exported iron ore at an annualized run rate of 251.7 million mt, indicating it is far off meeting guidance and taking into account it sells around 25 million mt of iron ore into the Brazilian market.
** Fortescue shipped 16.15 million mt in May, up 11.5% on month and 7.9% on year, taking January-May exports to 71.37 million mt, up 0.7% on year. The Perth-based company exported 158.38 million mt over July 2020 to May 2021, accounting for around 91% of its 175 million-180 million mt guidance for fiscal 2020-21.
** Roy Hill’s shipments from Port Hedland totaled 3.91 million mt in May, a slump of 24.5% on month and 24.2% lower on year, due largely to maintenance work. However, the company’s exports over January-May rose 16.2% to 22.88 million mt.
** From Saldanha Port in South Africa in May, iron ore exports were 4.19 million mt, up 6% on month and a 4% increase on year. The port’s exports in the first five months of the year totaled 21.09 million mt, down 5.4% on year.