China’s demand helped sustain dry bulk seaborne trade during the year of the pandemic that was 2020. As a result, an economic rebound with the added emphasis on infrastructure is expected to further improve demand for Australia’s iron ore moving forward. In a recent report, shipbroker Banchero Costa said that “2020 was still a reasonably positive year for global iron ore trade, given that demand from China remained strong, and the main constrain has actually been if anything insufficient supply capacity from the exporters. Total global loadings in the 12 months of 2020 were up +1.4% yearon-year to 1547.0 million tonnes, according to vessels tracking data from Refinitiv. Mainland China accounted for 73% of global seaborne iron ore imports, and saw imports increase by +6.9% y-o-y to 1107.5 mln tonnes in 2020”.

According to the shipbroker, “things were less rosy in the rest of the world. Imports to Japan declined by -13.0% y-o-y to 86.6 mln tonnes in 2020. Volumes to South Korea declined by -6.2% y-o-y to 69.5 mln tonnes. Imports to the European Union crashed by -25.1% y-o-y to 70.3 mln tonnes in 2020. In terms of exporters, Australia was still the king in 2020, accounting for 57.3% of global iron ore shipments. In the 12 months of 2020, Australia exported 886.4 mln tonnes of iron ore, which was a +3.3% increase year-on-year. Brazil, the world’s second largest exporter, continued to struggle, with exports declining by -2.0% y-o-y to 334.0 mln tonnes in 2020. In 2020, Australia performed particularly well in the first half of the year”.

“In the first 3 months of 2020, Australia exported 203.1 mln tonnes of iron ore, up +7.5% y-o-y. The first quarter is traditionally the quietest period of the year, as it’s affected by the Lunar New Year holidays in China, as well as weather disruptions from the “Wet” season in Northern Australia. The second quarter of 2020 saw shipments of 235.4 mln tonnes from Australia, up +4.7% y-o-y. In the third quarter, exports slowed down marginally to 220.3 mln tonnes, which was still +0.6% y-o-y from the same quarter in 2019. The fourth quarter of 2020 saw exports bouncing back to 227.5 mln tonnes, up +1.2% compared to the same quarter in 2019 Exports from Australia in the first quarter of 2021 have again been pretty strong, rising by +2.8% y-o-y to 208.8 mln tonnes”, said the shipbroker.

“The main iron ore export terminals in Australia are: Port Hedland (513.6 mln tonnes loaded in 2020), Dampier (135.7 mln t), Port Walcott (183.4 mln t), Cape Preston (19.4 mln t), Geraldton (12.1 mln t), Esperance (9.2 mln t), Whyalla (6.7 mln t). In terms of destinations of the shipments, things were quite predictable in 2020. Mainland China is still by far the top destination for Australian iron ore, accounting for 82.9% of Australia’s exports in 2020. Shipments to Mainland China increased by +5.5% y-o-y to 734.9 mln t in 2020. On the other hand, exports from Australia to Japan declined by -13.0% y-o-y to 58.4 mln tonnes in the 12 months of 2020. Shipments to South Korea declined by -2.8% y-o-y to 52.9 mln tonnes. The largest increase was to Vietnam, up by +74.2% y-o-y to 7.9 mln tonnes in 2020. And how is it going in the first quarter of 2021? So far this year, shipments from Australia to Mainland China are still increasing, but by a more modest +1.2% y-o-y, to 167.4 mln tonnes in 1Q2021. However, the picture looks brighter in the rest of the world. Shipments from Australia to Japan are still down in 1Q2021, but by only -3.4% y-o-y to 15.1 mln tonnes. Volumes to South Korea have actually surged in 1Q2021 by +20.5% y-o-y to 14.7 mln tonnes. Those to Vietnam are up +50.8% y-oy in 1Q2021 to 3.0 mln tonnes”, Banchero Costa concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide