More on Pilbara iron ore weakness

From Macquarie:

Iron-ore shipments from the main ports in Western Australia peaked at ~830mtpa in late 2015. The latest port data suggests iron-ore shipments are down ~50mtpa from the 2HCY15 average, with RIO and BHP being the main culprits. RIO’s 2HCY15 shipping rate was 20mtpa higher than production, hence some decline was anticipated, but with RIO running ~35mtpa and BHP ~15mtpa below the respective 2HCY15 run rates, the speed of the decline has been somewhat surprising.

We believe the material decline in Western Australian shipping rates, combined with the loss of Samarco which ceased pellet shipments in January, was the key contributor to the recent rise in iron-ore prices. This year’s wet season has been comparatively benign, but still appears to have impacted the production rates for BHP and RIO, with FMG’s shipping rates largely unaffected.

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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.