Australia's iron ore exports have surged to near record highs on heavy Chinese buying, new figures show, setting the scene for strong production results from BHP and Fortescue Metals Group tomorrow.
Shipments of the country's most valuable commodity export touched 32.8 million tonnes in November after a 69 per cent increase in the previous year, Bureau of Statistics figures supplied to UBS show.
The strong monthly performance was just shy of a record 33.2 million tonnes earlier in the year, and came despite a fall in shipments to Japan.
Buyers from China stepped in to pick up the slack. It bought 74 per cent of Australia's iron ore exports in the year to November.
The surge is a further sign of the industry's strength after Rio Tinto last week revealed record iron ore production results of 47.2 million tonnes in the fourth quarter.
An analyst at UBS, Glyn Lawcock, said he expected BHP to report more good news, amid signs global steel production may have expanded by 3 per cent in the quarter.
''We expect the company to report strong quarterly production figures underpinned by increased demand for raw materials from the global steel industry,'' he said in a note to clients.
Port Hedland figures last week also showed growth in iron ore exports continued into December. Shipments rose 6 per cent to 14.87 million tonnes.
Spot prices are about 90 per above last year's contract prices, and the figures add more weight to producers campaigning for hefty price rises in negotiations for benchmark prices for the 2010 financial year. Insatiable demand for iron ore is expected to push up contract prices by as much as 40 per cent. An analyst at Macquarie, Brendan Harris, said BHP might benefit more than Rio because it sells about 30 per cent of its iron ore on the spot market.
Exports of Australia's other huge commodity export - coal - had a quieter month in November, the ABS figures showed. Shipments of coking coal used in steel mills fell 4.3 per cent to 7.5 million tonnes, while thermal coal used in power generation fell 13.1 per cent to 10.8 million tonnes.
Despite these declines, analysts expect big price rises of coal because the spot market is more than 30 per cent above last year's contracts.
Source: Sydney Morning Herald
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