Port Hedland’s exports have dropped to six-month lows in August amid weakening iron ore prices and simmering demand from China.
According to Pilbara Ports Authority, Port Hedland shipped 44.7 million tonnes of exports in August including 43.9 million tonnes of iron ore exports.
This represented a 4 per cent year-on-year decline out of the world’s largest bulk export port.
Forty-six million tonnes of iron ore were shipped from Port Hedland in August last year.
The iron ore market has been marred by lower steel margins and strict production controls which have seen the price spiral from its record $US230 per dry metric tonne recorded in May.
The price of 62 per cent ore fines imported to China’s Qingdao port was trading at $US128.20 ($174.13) per dry metric tonne on Friday.
Rio Tinto has suffered from the demand drop with the mining giant updating its guidance in July for the 2021-22 financial year, which is expected to be on the low end of its 325-million-to-340-million-tonne range.
A report from UBS has stated that Rio Tinto will need to ship around 85 million tonnes in the second half of the 2021 financial year and that COVID-19 restrictions are continuing to impact production output.
“Based on UBS Evidence Lab shipping data, Rio Tinto is currently on track to ship around 81 million in the third quarter and as a result we see five to 10 million tonnes downside risk to 2021 guidance,” the report stated.
“The key concern at the moment is China pig iron production which remains weak in August.”
UBS is expecting Rio Tinto to slash its sales guidance further due to the market decline.
In August, a report from CRU Insight found China steelmakers are cutting their output after entering record territory earlier this year with further price declines expected.