SYDNEY (Reuters) – Australia’s Port Hedland iron ore terminal was clearing all vessels from its harbor on Thursday as a tropical cyclone intensified off the western Australian coast, Pilbara Ports Authority said.
The port’s biggest user, global mining giant BHP, said it was monitoring the progress of the storm, known as Cyclone Joyce, amid forecasts it will reach Category 3 strength by early Friday morning, packing wind gusts of 165-224 kilometers per hour. [restrict]
The port accounts for over half of Australia’s iron ore exports, handling more than a million tonnes a day from the Pilbara iron belt, the majority bound for Chinese steel mills.
“Pilbara Ports Authority has commenced clearing the Port of Port Hedland of vessels this morning, and expects the port to be fully clear by late this afternoon/evening,” the port said in its Thursday statement.
The Bureau of Meteorology said a tropical low had reached cyclone strength earlier in the day and would intensify during the day, affecting the Pilbara region on Friday or early Saturday.
The port is used by three of Australia’s top four iron ore miners – BHP, Fortescue Metals Group and Gina Rinehart’s Hancock Prospecting.
Australia’s top iron ore miner, Rio Tinto, uses the port of Dampier, 420 kilometers (260 miles) south of Port Hedland. A Rio spokesman said the company was keeping an eye on the cyclone’s path.
Pilbara Ports Authority said it was also monitoring weather conditions at the Dampier port.
Iron ore markets have been particularly sensitive to supply-side issues in recent months as China’s steel industry increasingly turns to imported ore to supplement low-grade ore at home.
According to commodities traders, a prolonged disruption to shipping from the port could lead to a scramble for available cargoes and lift prices.
Iron ore traded between $53 and $95 a tonne in 2017 and currently stands at $78.31 a tonne
The Pilbara region is home to many of the world’s largest iron ore mines, with Port Hedland last month accounting for over 41 million tonnes of exports.
On average, there are 10 to 13 tropical cyclones between November and April in the Australian region, four of which typically cross the coast, data from the bureau shows. [/restrict]