Ironore - Port Hedland NOW

Port Hedland regularly sets records either for house prices or for iron ore exports. Last month the price of iron ore fell suddenly to $86.70. In the same month a shipment of iron reached another record with 248,366 tonnes of iron ore loaded on to one ship by BHP.

But according to a report in the West Australian newspaper, “Port Hedland authorities have reported a 9.5 per cent fall in iron ore shipments to China.

Iron ore demand, a key indicator of industrial activity in China, fell by 9.5 per cent in September from the previous month to be flat on the year, port authority data showed.

September shipments to China dipped to 15.13 million tonnes, down from 16.72 million tonnes in August, according to the Port Hedland Port Authority.“

Iron ore prices currently trade at just above $100t. Is this the tipping point of the boom-bust cycle for Port Hedland? If the resting price of iron ore is around $100, what will be the resting price for houses in Port Hedland?

ref. http://au.news.yahoo.com/thewest/business/a/-/wa/15041896/iron-ore-shipments-to-china-down/

Make no mistake, the slowing Chinese economy is bad news for Australia and Aussie mining stocks. And as we see it, it’s only set to get worse, according to Kris Sayce of MoneyMorning ref Will Fortescue ‘Break the Buck’? 5 September 2012.

Iron ore prices have fallen to $US89/t in the past nine weeks. According to Sayce hedge fund managers believe that Fortescue could struggle to repay its debt if iron prices fell below $US100. He also predicts that the Chinese economy is collapsing and there is absolutely no guarantee the iron ore price will ever return to $US120.

The cost of doing business in iron ore (delivered to China) for some of our biggest miners:

Rio Tinto $US38/t
BHP Billiton $US41/t
Fortescue Metals Group $US63/t
Atlas Iron $83/t

Ref: North West Telegraph, 12 Sept 2012, p.27

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