The ferrous complex was roughly stable Friday July 2, 2021 as spot eased, paper firmed and steel fell:
June may have been a boom month for Brazil but it was a bust for Australia as RIO falls well behind its target run rate. Westpac:
- If May iron ore export volumes fell short of our expectations, then June exports really disappointed. After just 76mt in May, exports in June fell to 73.2mt according to our shipping activity models. That’s -10%yy and -6%3myy. Given recent price gains and the weather-based drag on exports in Q1, we had expected to see a stronger rebound in Q2. That clearly was not the case.
- While Port Hedland iron ore exports have been slightly softer year to date (-3%) and over the last quarter (-3%3myy), the real weakness has been at Port Dampier & Cape Lambert where volumes for the year to date are running at -15%. Exports from Port Dampier hit a 16m low in June!
- Rio did note in its Q1 production release that “labour resource availability and weather challenges disrupted maintenance in the mine processing facilities”. There have been press reports noting “Fire-prone Rio Tinto port shut for maintenance” suggesting that there are specific issues at work. Rio will update its quarterly production report on July 16 which may give guidance on how quickly exports will return to a more normal situation.