Event Our latest port data, which tracks gross shipments from key iron-ore ports in Western Australia, suggests that the total iron-ore shipping rate has begun to recover after a ~40mtpa fall over the first six weeks of FY17, which we believe provides some further clarity as to the drivers behind the recent rally in ironore prices and we reaffirm our view that prices should stabilise closer to US$50/t for the remainder of 2017.
Impact Shipments in recovery mode after a weak start: Macquarie’s port data, which tracks gross shipments from the key iron-ore ports in Western Australia, suggests the annual shipping rate peaked at ~840mtpa in early July, with BHP in particular reporting a strong finish to FY16. However, in the following six weeks iron-ore shipments in WA declined by ~40mtpa to ~800mtpa (on a six week rolling average) with RIO and FMG reporting weaker volumes. In the past three weeks the shipping rate has recovered towards 830mtpa.
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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.
