You are here

Iron ore trade to China faces disruption after Tianjin blast

[TIANJIN] Iron ore shipments to China have been disrupted after deadly explosions at Tianjin's port prompted authorities to restrict vessels calling at the facility that funnels commodities into the north and ships out steel.

"There was no damage to the iron ore discharging berths following the explosion," Melbourne-based BHP Billiton Ltd said in a statement on Thursday. "However, shipments and port operations have been disrupted as a result and we are working with our customers to minimize any potential impact." Mills in China are the world's largest buyers of iron ore and the blasts, which rocked the city late on Wednesday night killing at least 17, will prompt shippers, traders and users to tap stockpiles and seek alternative routes. The explosions occurred at a hazardous-goods warehouse, according to a statement from the port. Iron ore prices dropped to the lowest level since at least 2009 last month as miners including BHP boosted output while demand growth stalled in China.

"It is unclear the extent of the disruption likely to be experienced to port activities," Fortescue Metals Group Ltd. said in a statement. The company is Australia's third-largest shipper. "We will be monitoring the situation." Ore with 62 per cent content delivered to Qingdao, another Chinese port, rose 0.2 per cent to US$56.31 a dry metric ton on Wednesday, according to Metal Bulletin Ltd. The data are issued daily, with yesterday's figure coming before the blasts were reported from Tianjin.

"This is a developing story, which could have a potentially positive short-term impact on pricing," Clarksons Platou Securities Inc said in a note. Material damage to the port could result in short-term disruptions to iron ore delivery, as well as lost or damaged stockpiles, it said.

About 15 mills get their ore from Tianjin port and no significant impact is seen in the short term as steelmakers have stockpiles that can cover about one-week's production, industry analyst Mysteel Research said in an e-mail. Stockpiles at the port's Beijiang wharf were estimated at 1.4 million tons, while holdings at the Nanjiang wharf were 5.7 million tons, it said.

Your feedback is important to us

Tell us what you think. Email us at

The port is located about 160 kilometers (100 miles) southeast of Beijing in Tianjin municipality. Some deliveries will be disrupted, Wang Xiaolei, a press officer at Tianjin Maritime Safety Administration, said by phone on Thursday.

Other ports on China's eastern coastline, especially those in Shandong and Hebei provinces, could accommodate the capacity that Tianjin's not be able to handle, according to Helen Lau, an analyst at Argonaut Securities in Hong Kong.

Tianjin handled 25.08 million tons of iron ore imports in the first half of the year, or 5.5 per cent of the country's total, according to customs data. It also shipped out about 30 per cent of the country's steel exports in the period.


BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to