A key analysis of November's dry bulk shipping indicators (Part 4 of 12)
Port Hedland
The world’s iron ore seaborne exports are significantly comprised of exports from Australia and used by major industry companies like BHP Billiton (BHP), Fortescue Metals Group (FMG), and Atlas Iron. Shipments through Port Hedland represented 55% of Australia’s iron ore exports last year, and more than 80% of the cargo goes to China.
November shipments plunge
According to the port authority data, shipments from the world’s biggest bulk export terminal, Port Hedland, stood at 29 million metric tons in November compared to 31.7 million tons in October and 22.3 million tons in November 2013. Shipments dipped to the lowest level since April 2014 as China, the world’s biggest buyer, ordered some mills to curb output to cut pollution before a global summit in November.
Some mills were ordered to suspend or reduce output before the summit at the Asia-Pacific Economic Cooperation forum in Beijing as the authorities sought to improve local air quality.
Gerard Burg, senior Asia economist at National Australia Bank, commented, “It’s related to the shutdowns that we saw in Hebei province related to the APEC conference. That’s certainly weakened spot demand for iron ore over that period.”
With exports dropping to their monthly lows from Port Hedland, dry bulk shippers such as Star Bulk Carriers (SBLK), Safe Bulkers Inc. (SB), Baltic Trading Inc. (BALT), and Knightsbridge Tankers Ltd. (VLCCF), as well as the Guggenheim Shipping ETF (SEA) may see a negative impact.
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