Conventional wisdom is that even though there has been a massive price fall for iron ore that volumes are holding up well. That’s a salve to the crash in iron ore prices, as at least the volume effect is offsetting the price fall somewhat.
But not so, according to Robert Rennie, Westpac’s Head of Market Strategy. Rennie, writing in his monthly wrap of global shipping activity, The Shipping News, said:
The optimist in me argues that iron ore export volumes continue to hold up well in the face of the ongoing price slump. However, the reality is that Australian export volumes have had a disappointing start to the year. Export volumes from Port Hedland are up 19% over the first quarter versus a year ago, down from +25% in Q4 last year. Average prices in Q1 this year would be down circa 50% versus the same period a year ago emphasising the hit to revenues from that sector.