Rio Tinto lifts iron ore shipments ahead of maintenance

UK-Australian iron ore mining firm Rio Tinto has had a strong start to September for iron ore shipments from its Pilbara ports, ahead of an expected weaker October because rail maintenance.

The four major Western Australian (WA) iron ore producers loaded vessels with lower deadweight tonnage (dwt) capacity in the week to 14 September at 18.15mn dwt compared with 16.85mn dwt in the previous week and above the average of 16.48mn dwt/week for the year to date. Vessels loaded by Rio Tinto increased in capacity to 8.02mn dwt from 7.74mn dwt the previous week and above an average of 6.59mn dwt/week for the year to date.

UK-Australian firm BHP also saw a rebound in vessels loaded to 5.51mn dwt from 4.79mn dwt and back close to its average of 5.54 dwt/week for the year to date.

Fortescue Metals' loadings were in line with its average for the year at 3.3mn dwt and down from 3.4mn dwt the week before, while Roy Hill saw its loadings rebound to 1.34mn dwt from 798,000t the week earlier and above its average of 1.05mn dwt/week.

Rio Tinto has a rail maintenance programme planned for October and is raising volumes in September to accommodate lower than average shipments in October. The maintenance programme is to help the firm settle in its AutoHaul system that it installed in 2018.

Rio Tinto struggled to maintain its iron ore shipments during January-May following a fire at its Cape Lambert facilities in January and damage caused by Cyclone Veronica at its Dampier port in March. These problems contributed to Rio Tinto cutting its production guidance for 2019 to 320mn-330mn t in June, having already reduced it to 333mn-343mn t from 338mn-350mn t in April.

Rio Tinto has loaded ships with a capacity of 244mn dwt in the year to 14 September, according to early shipping data. The initial shipping data overestimates actual iron shipments by around 5pc because it is the maximum capacity of the vessels loaded. Initial shipping data indicates Rio Tinto loaded vessels with a capacity of 90.89mn dwt during April-June. But the firm officially shipped 85.4mn t of iron ore during this period, according to Rio Tinto's quarterly report.

This suggests Rio Tinto has loaded around 232mn t of iron ore in the year to 14 September, leaving it with a target of around 88mn t for the remaining 15 weeks of the year to meet the bottom of its guidance. This implies vessel loadings of around 6.16mn dwt/week for the remainder of the year to reach the bottom of its target, which is significantly below the weekly average achieved in the disrupted first half.

Rio Tinto usually has a stronger second half of the year than the first as it suffers from fewer weather disruptions associated with WA's cyclone season, which runs from December-April. But the rail maintenance programme for October may significantly affect shipments for that month.

WA iron ore loadings mn dwt