Benchmark 62% Fe fines imported into Northern China (CFR Qingdao) were up 1.3%, changing hands for $219.26 a tonne, according to Fastmarkets MB.
“Iron ore futures extended gains as sentiment remained buoyed by signs of strong demand in China,” said ANZ senior commodity strategist Daniel Hynes.
BHP on track to meet guidance, Vale and Rio off the pace
Concerns over tight global iron ore supply also supported prices, with seaborne cargoes and portside materials in China trading at the highest since May 19 above $200 a tonne.
China’s iron ore port inventory hit a four-month low last week, while weekly shipment arrivals fell.
Adding to supply concerns, Vale halted production at two mines and decommissioned a dam over safety concerns.
“This could further delay the recovery in iron ore output in Brazil,” Hynes said.
Majors
Iron ore exports from major producers improved in May, but most miners will need to lift run rates over the second half of 2021 to meet their sales guidance.
Shipments from Rio Tinto, BHP, Vale, Fortescue Metals Group and Roy Hill, and Saldanha port in South Africa, reached 99.41 million tonnes in May, the highest level so far this year, up 7.8% month on month and a 3% increase year on year, according to S&P Global Platts.
This took January-May exports to 465.01 million tonnes, up 1.7% on year.
“June is normally one of the strongest months of the year for shipment volumes as the Australian financial year ends on June 30. BHP and Fortescue will want to optimize revenues and achieve full-year sales guidance before closing the book on the year, while Rio Tinto and Vale – which use a calendar financial year – will want to post solid first-half results,” said S&P Global Platts in a note.
“A strong June is usually followed by a weaker July due to producers needing to rebuild stocks,”
Rio Tinto shipped 26.4 million tonnes from Port Dampier and Cape Lambert in May, up 8.8% on month but down 4.7% on year. Its exports totaled 128.86 million tonnes over January-May, down 2.4% on year.
The company has been carrying out some maintenance work which should end mid-June, but it is expected to have a small impact on shipment levels. The annualized export run rate over January-May was 311.5 million tonnes, and the miner is targeting 325 million-340 million tonnes for the full 2021 year.
BHP’s shipments rose 5.7% on month in May but fell 0.9% on year to 25.51 million tonnes. This took its shipments to 116.68 million tonnes over the first five months of this year, a drop of 3% on year.
BHP exported 261.32 million tonnes over July 2020 to May 2021, accounting for around 95% of its guidance for the 2021 financial year of 276 million-286 million tonnes.
Vale’s estimated seaborne exports from Brazilian ports in May totaled 23.26 million tonnes, up 14.8% on month and 22.7% on year. This took January-May volumes to 104.14 million tonnes, up 13.4%. Vale said its iron ore production would be 315 million-335 million tonnes in 2021.
Over January-May, Vale exported iron ore at an annualized run rate of 251.7 million tonnes, indicating it is far off meeting guidance and taking into account it sells around 25 million tonnes of iron ore into the Brazilian market.
($1 = 6.3885 Chinese yuan renminbi)
