The largest single shipment of iron ore left the port of Port Hedland in Western Australia on Tuesday.
BHP Billiton loaded 263,989 tonnes of iron ore onto vessel Abigail N.
According to Pilbara Ports Authority data, this single shipment broke the previous record achieved by Hugo N in December 2013 by 27 tonnes.
But in what is an example of miners pushing volumes to make up the difference of the falling commodity price, using the spot price of about $63 a tonne the shipment was worth about $16.75 million.
The price of iron ore has fallen by around half in the last 12 months.
If that same quantity of iron ore set sail a year ago it would’ve been worth about $31.7 million, using the average iron ore price for February 2014 of about $120 a tonne.
BHP’s revenue has been sliding as a result of falling commodity prices. The miner this week revealed its first half profits were down 47.4% to $US4.265 billion. Underlying attributable profit was $5.352 billion, down 31% and slightly ahead of expectations.
Weakness in the Chinese property market has dampened the nation’s demand for steel and its biggest input: iron ore.
Iron ore represents more than 40% of the BHP’s business. To deal with the sliding commodity price the miner has been cutting costs and boosting outputs. The miner’s cash cost per tonne is about $US20.35 a tonne but it hopes to get that down to $US20 a tonne.
In the six months to December, iron ore production was a record 113 million tonnes. The company expects a total of 225 million tonnes of ore to be mined by the end of the financial year.
With higher volumes and lower costs, BHP can still make healthy margins if the iron ore price drops to $50 a tonne as some analysts are expecting.