China Leading Rebound in Demand for Australian Iron Ore

Demand for Australia’s iron ore has been on the rise, with China leading the pack. In its latest weekly report, shipbroker Banchero Costa said that “2023 was a very positive year for global iron ore trade. In Jan-Dec 2023, global loadings of iron ore increased by +5.1% y-o-y to 1,631.9 mln tonnes, from 1,552.2 in the same period of 2022, based on AXS Marine vessel tracking data. The trend remained positive in JanSep 2024, with loadings growing by +3.9% y-o-y to 1246.1 mln tonnes. Exports from Australia increased marginally by +1.6% y-o-y in Jan-Sep 2024 to 691.7 mln tonnes. From Brazil, exports surged by +7.6% y-o-y in Jan-Sep 2024 to 280.7 mln t. From Canada there was a +4.9% y-oy increase to 44.9 mln tonnes. From South Africa volumes increased +0.8% y-o-y to 39.8 mln t. India also saw an increase of +0.9% y-o-y in Jan-Sep 2024 to 30.4 mln t. Ukraine has seen a rebound to 11.5 mln t from just 0.2 mln t in the same period of 2023. This however is still below the 18.0 mln t exported by Ukraine in Jan-Sep 2021”.

According to Banchero Costa, “demand has been again rebounding in China and the Middle East. Iron ore imports into China increased by +3.7% y-o-y in Jan-Sep 2024 to 926.5 mln tonnes. Imports into Japan declined by -3.7% y-o-y to 68.7 mln t. To the EU, imports increased by +2.3% y-o-y to 54.3 mln t. Volumes into South Korea increased by +1.3% y-o-y to 53.2 mln t. To Vietnam volumes were up by +39.3% y-o-y to 16.0 mln t.

Imports into Malaysia increased by +16.3% y-o-y to 17.5 mln tonnes. To Oman, volumes were up +13.2% y-o-y to 10.4 mln t, to Saudi Arabia by +30.5% y-o-y to 8.8 mln t, to Turkey +21.6% y-o-y to 6.8 mln t. Australia is by far the world’s largest exporter of iron ore, with a 55.5% market share in Jan-Sep 2024, well ahead of Brazil’s 22.5%, Canada’s 3.6%, and South Africa’s 3.2%. Export volumes from Australia have been relatively stable in recent years, with moderate increases”.

“In 2020, iron ore exports from Australia surged by +4.1% y-o-y to 903.0 mln tonnes. This was followed by a -0.3% y-o-y decline in 2021 to 900.0 mln t, then a +0.8% y-o-y increase in 2022 to 907.2 mln t, and a +0.9% y-o-y increase in 2023 to 915.5 mln t. The main iron ore export terminals in Australia are: Port Hedland (417.4 mln t loaded in Jan-Sep 2024), Port Walcott (125.0 mln t), Dampier (109.1 mln t), Cape Preston (11.0 mln t), Geraldton (9.7 mln t), Whyalla (7.6 mln t), Esperance (5.3 mln t), Koolan Island (2.0 mln t), Port Latta (1.7 mln t). The vast majority (78.4% in Jan-Sep 2024) of iron ore volumes from Australia are loaded on Capesize and Newcastlemax vessels (i.e. vessels in the 120-220k dwt range), with 15.0% on VLOCs, 4.5% on Post-Panamaxes, and 1.6% on Kamsarmaxes. Mainland China is by far the top iron ore importer from Australia, with a 83.8% share of shipments from Australian ports in Jan-Sep 2024. Exports to China from Australia increased by +0.9% y-o-y to 579.6 mln t in Jan-Sep 2024, from 574.3 mln tonnes in Jan-Sep 2023. This was also well above the 565.4 mln tonnes shipped by Australia to China in Jan-Sep 2020. The second largest destination for Australian ore is Japan, with a 5.7% share this year. Shipments from Australia to Japan declined by -1.5% y-o-y to 39.5 mln t in Jan-Sep 2024, from 40.1 mln t in Jan-Sep 2023. Export to South Korea rebounded by +3.8% y-o-y to 39.4 mln t in Jan-Sep 2024. Volumes from Australia to Taiwan declined by -1.9% y-o-y to 10.6 mln tonnes so far this year. To Vietnam volumes increased by +32.4%% y-o-y to 9.8 mln tonnes in Jan-Dec 2023”, Banchero Costa concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide