Iron ore sets trade record as price recovers
BHP Billiton's iron ore loading facility in Port Hedland. Photo: Reuters
AUSTRALIA'S iron ore miners are set to cash in on rebounding prices, with statistics suggesting record amounts of the bulk commodity were shipped during December.
The authority in charge of Port Hedland in Western Australia revealed on Thursday that the 25.995 million tonnes of iron ore shipped during December was the highest monthly trade in history.
Port Hedland is the nation's most prolific multi-user port for iron ore, playing host to the export operations of BHP Billiton, Fortescue Metals and Atlas Iron.
The December result easily eclipsed Port Hedland's previous monthly export record of 22.8 million tonnes, set in August, and was about 22 per cent higher than the volume exported in December 2011.
The result reflects the expansion plans BHP and Fortescue have under way and a similar rise is likely to have been achieved at Rio Tinto's nearby port at Cape Lambert.
The rising tide of exports has coincided with a revival in the benchmark iron ore price since its well-publicised slump in September.
The benchmark price was $US144.90 a tonne on Thursday, according to data compiled by Bloomberg - nearly 70 per cent higher than the $US87 a tonne recorded at the slump's nadir in September.
Iron ore is crucial to the Australian economy, and not just because it ranks as the nation's most lucrative export. The commodity is one of two products captured under the federal government's new mining tax and the prospect of improving prices and rising export volumes increases the chances that the Gillard government will enjoy revenue flows from the new tax regime.
The combination of higher prices and export volumes in recent months has helped iron ore miners repair much of the damage done to their share prices in 2012.
Rio Tinto shares rose by $1.63 to $69.25 on Thursday, lifting the stock to its highest since February 14.
BHP shares rose by 31¢ to $38.15, their highest since February 6.
Fortescue tested its highest peaks in eight months during Thursday's session before closing 12¢ higher at $5.04.
Arrium, which exports from Whyalla in South Australia, was also testing six-month highs when its shares closed 3¢ higher at 96¢.
Executives from Rio Tinto and Fortescue suggested iron ore prices were being pushed up by Asian customers stocking up before their winter and the traditional cyclone season in Australia's north.
An end to that stocking trend could see prices slip moderately lower in the months ahead. The iron ore market appears to have some cyclical trends, with the price tending to rise between December and March in recent years and slump between July and September.