Cyclone forecast to form near Australian iron ore ports

Reuters News
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Posted: Jan 18, 2015 9:17 PM

SYDNEY (Reuters) - Australia's iron ore ports could be hit by a cyclone as a tropical depression builds over the country's northwest and heads into the Indian Ocean, with winds forecast to reach 100 kmph (62 mph), the weather bureau said on Monday.

Ports in the path of the potential cyclone and the mining companies that ship tens of millions of tonnes of iron ore each month to steel mills in China and elsewhere were not immediately available for comment on what precautions were underway.

Cyclone emergency measures call for suspension of loading and railing at the ports, though mining typically continues unless the bad weather extends hundreds of kilometers (miles) inland to the mine centers.

Any delay to iron ore shipments could lend price support to depressed markets, which are in oversupply mainly due to rising shipments from Australia.

Iron ore stood at $68 a tonne, slightly above the Dec 23 low of $65.60, the weakest price since June 2009.

A tropical low pressure system is forecast by the Australian Bureau of Meteorology to move offshore later on Monday, bringing cyclone-strength gales to a 600 km (375 mile) coastal stretch between Broome and Port Hedland. Tropical cyclones derive their energy from warm ocean water.

Iron ore shipped via the Indian Ocean terminal of Port Hedland totaled nearly 40 million tonnes in December, mostly mined by BHP Billiton and Fortescue Metals Group.

Depending on how close the system tracks the coast, gales may extend west to Dampier, where Rio Tinto ships ore.

Australia's cyclone season runs from Nov. 1 to April 30.

Last season 10 tropical storms reached cyclone strength, just under the national average of 11.

(Reporting by James Regan; Editing by Michael Perry)