IRON ore exports from the Simandou mine in Guinea surged in May hitting 2.2 million tons, sharply above April’s record of 1.3Mt, reports Bloomberg News.
The improvement marks a significant step in the ramp-up of the operation tipped to reshape the global iron ore market, the newswire added. The jump from fewer than 600,000 tons monthly in the first quarter of the year suggests infrastructure constraints at the Morebaya port are easing.
“The May numbers suggest something has shifted, likely the improving loading cadence at Morebaya as port infrastructure matures,” said Alexandre Claude, CEO of DBX Commodities.
Dry bulk advisory Ifchor Galbraiths attributed part of the acceleration to a government push for the project’s two consortiums – China-Singapore-led BWCS and the Rio Tinto-Chinalco joint venture Simfer – to operate more efficiently together, partly to optimise royalty payments. Some bauxite industry assets have also been redeployed to support the iron ore ramp-up.
Ifchor Galbraiths forecasts shipments of up to eight million tons in the third quarter, rising to 12Mt in the fourth. Rio Tinto’s official guidance targets full capacity within 30 months, though some analysts expect the timeline to stretch.
The project, nicknamed the “Pilbara Killer” for its potential to displace Australian supply, has capacity to ship 120Mt annually. Whether the recent surge is sustained will be tested during the mid-year wet season.
The pickup comes as China’s steel demand remains under pressure and iron ore inventories are elevated, leaving the market uncertain whether Simandou’s volumes will displace existing supply or simply add to a well-supplied market, said Bloomberg News.
