Iron ore better pray for another cyclone

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UBS has some estimates on how soft Pilbara iron ore shipments were in January:

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We estimate BHP Billiton’s share for the month at 19.2Mt or 56.8%. This represents a soft month for BHP Billiton, down 7% sequentially, and an annualised run rate of just 225Mtpa. FY 16 production guidance remains 270Mt. We estimate FMG’s share of January exports from Port Hedland at 12.9Mt, or 38.2%, down 13.4% sequentially. This is also a soft month for FMG and implies an annualised rate of 152Mtpa.

So, on an annualised basis we were down 58mt in Port Hedland. If we extrapolate that 13.3% fall to RIO’s ports then we get a total annualised miss above 100mt. Brazil was hit hard on seasonality. Yep, that’ll give you your price spike.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.