There has been plenty of chatter about the sharp contraction in Chinese iron ore imports during May, particularly in Australia.
In May, China imported 70.87 million tonnes of ore, 11.6% less than April and 8.4% lower than May 2014.
This decline has led some to conclude that as China’s largest iron ore seaborne supplier, exports from Australia collapsed as well.
In April the ABS reported iron ore exports in original dollar values was $3.484 billion — a decline of 14.0% on March. But data from Australia’s largest iron ore loading port, Port Hedland, suggests demand for Australian ore remained strong.
According to Port Hedland Port Authority, last week iron ore exports to China totalled 31.691 million tonnes. This was not only 5.2% higher than April but 6% above the levels shipped in May 2014. Even data for April, something that would overlap with Chinese import data for May, volumes were 30.117 million tonnes, 4.2% greater than a year earlier.
Here a chart showing total iron ore exports from Port Hedland going back to 2008. It certainly doesn’t suggest that export volumes are collapsing.
While Port Hedland is not the only Australian port that ships iron ore to China, it does make up the vast majority of Australian exports.
This suggests that while Chinese iron ore imports dropped significantly in May, it was a result of weakening demand, or trade disruptions, from nations other than Australia.