Australia sees surge in iron ore export revenues

6 January 2014 (Last Updated January 6th, 2014 18:30)

Australia will earn $21.9bn from iron ore exports over the last quarter of 2013, compared to the decreasing thermal and coking coal revenues of $10.1bn, according to East & Partners.

Australia will earn $21.9bn from iron ore exports over the last quarter of 2013, compared to the decreasing thermal and coking coal revenues of $10.1bn, according to East & Partners.

The forecasts come from East & Partners' iron ore and coal (IOC) index, which is based on major exporting ports and official government data.

The report suggests that the 7.9% revenue increase from the previous quarter came from a 6.3% rise in iron ore exports, to 161 million tonnes.

"A combination of supply and price action resulted in higher iron ore export revenue."

East & Partners said that the shipments of 151.4 million tonnes of iron ore for the third quarter of 2013 are 20.9% higher than the volume for the corresponding quarter last year.

Thermal coal shipment volume in the third quarter of 2013 remained steady at 48.5 million tonnes, reflecting a significant pro rata 15% improvement over 2012 export volumes.

Metallurgical coal export shipments stood at 42.7 million tonnes in the third quarter of 2013, indicating an increase of just 1%.

According to East & Partners, the forecasted coking coal tonnage for the fourth quarter of 2013 is anticipated to trend higher and surpass 44 million tonnes, despite falling prices.

East & Partners senior markets analyst Martin Smith said that the latest forecast is promising for the iron ore and coal industry, which is shifting its capital expenditure from capacity and efficiency improvements to production.

"The majority of industry analysts expected growing iron ore stockpiles and declining Chinese economic growth to drag on iron ore prices, however this has not eventuated," Smith said.

"The price for ore with 62% content delivered to the Chinese port of Tianjin remaining persistently over $130 is reflected in substantially improved export revenue."

Smith noted that annual iron ore revenue growth now exceeds 6% as the IOC Index forecasts fourth quarter iron ore revenue surpass $21.9bn.

"A combination of supply and price action resulted in higher iron ore export revenue, however metallurgical and thermal coal shipments are not lifting enough to offset rapidly deteriorating coal prices," Smith added.

"Thermal coal revenue is forecast to record a quarterly fall of 3.4% to $4.02bn, compared to a declining $6.1bn revenue expectation for metallurgical coal, a decrease of 1.6%."

Energy