Iron ore glut hits new highs – by Sarah-Jane Tasker (The Australian – March 6, 2015)

http://www.theaustralian.com.au/business

PORT Hedland, the world’s largest bulk-export terminal, shipped the most iron ore on a daily basis last month as suppliers increased output through the facility despite the slump in prices.

The latest statistics from the port showed monthly throughput of 48.8 million tonnes of the steelmaking commodity in February — a 6.2 million tonne, or 14.8 per cent, jump on the same period last year. Actual iron ore exports for the month hit 35.6 million tonnes, a 28 per cent hike on last February’s tally.

The push by Rio Tinto, BHP Billiton and Fortescue Metals to increase tonnes into an oversupplied market has continued at a steady pace over the past few years. But the new supply is now hitting the market at a time when the price of the steelmaking commodity continues to fall and China forecasts its slowest growth in more than a decade.

A total of 1.27 million tonnes of iron ore was shipped from Port Hedland each day in February, according to Bloomberg. That surpassed the previous high of 1.21 million tonnes a day in September.

West Australian Premier Colin Barnett has previously accused the major miners of seemingly acting in “concert” with their new supply keeping the iron ore price at record lows, which is hitting his state’s budget.

ANZ’s Mark Pervan said the high iron ore prices of 2010 and 2011 had triggered a wave of new supply, which was now struggling to be absorbed by the weakened demand environment.

The head of industry economics and research at the bank said in a recent report that the biggest supply response had come from Australia, where three of the four largest iron ore producers had committed more than $US10 billion ($12.8bn) in expansions over a four- to five-year period.

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