Australia feeds China demand for iron ore

Sydney: Australian shipments of iron ore to China looked to have stayed strong in August, a month after Australia boasted its second-highest exports ever to the Asian giant and a sign of healthy demand for resources. Iron ore exports to China from Port Hedland, which handles about a fifth of the global seaborne market for the steel-making raw material, rose 9 percent in August from July. Ore shipments of 22.3 million tonnes were up a hefty 33 percent on August last year and not far from all-time highs hit in May. Since the figures are released just a few days after the end of the month, they offer a timely leading indicator of demand in China. Australia is the single largest supplier of the ore to China, ahead of Brazil. [caption id=“attachment_1086805” align=“alignleft” width=“380”]  Reuters[/caption] Iron ore is Australia’s single biggest export earner, bringing in around A$60 billion in a good year. The strength of shipments increases the chance that Australia will report a trade surplus for August, and also add to economic growth. Figures on July trade from the Australian Bureau of Statistics (ABS) out on Thursday underlined the importance of China to the resource-rich nation. Australian exports to China in July were the second highest on record at A$7.75 billion, an increase of 29 percent on the same month last year. Much of that is thanks to iron ore prices which have surged around 25 percent in the past three months to reach US$138 a tonne <.IO62-CNI=SI>. Back in July last year, prices had been in a steep decline which bottomed in early at $86.70 a tonne in early September. But export volumes are also in a long-term uptrend as massive investment by Australian miners expands production. The ABS data showed quantities of ore exported in July rose to China, Japan and South Korea. Rising exports are playing a crucial part in supporting the economy amid caution on spending by consumers and businesses at home. Data out on Wednesday showed the economy grew by 2.6 percent in the year to June, with exports accounting for no less than 1.4 percentage points of that. Port Hedland is used by BHP Billiton , Fortescue Metals Group and Atlas Iron to ship iron ore cargoes, which are expected to exceed 200 million tonnes this year. Overall iron ore exports from the port were 27.4 million tonnes in August, up 20 percent on the same month last year. Reuters