The increase in iron ore production by mining heavyweights BHP Billiton (ASX: BHP) and Fortescue Metals Group (ASX: FMG) has contributed towards a record-breaking month of exports through Western Australia's Port Hedland, according to statistics released by Port Hedland Port Authority.
A total of 28.96 million tonnes of iron ore were shipped from the port in September, exceeding August's figure by 5.7% and the figure for September 2012 by an incredible 45.6%. Iron ore exports took a sudden plunge last year when the commodity's price tag dropped below US$100 per tonne, but now that it is showing strong resilience above the US$130 per tonne mark, miners are ramping up their production levels.
September topped off a strong three months for the miners, whereby a total of 83 million tonnes were shipped – a 33% increase on the same period from a year earlier. The increases in production and shipments should reflect in strong quarterly revenues, which will be announced with their latest production figures this month (Fortescue and BHP will report on October 17 and October 22, respectively).
Although these two companies account for the greatest exports from the port, Atlas Iron (ASX: AGO) also ships through the port whilst Rio Tinto (ASX: RIO) uses its own port facilities at Dampier and Cape Lambert, as reported by The Australian.
Foolish takeaway
Whilst there are certainly positive signs for BHP and others in the industry, the sector remains very volatile. Right now, the risks still outweigh the potential benefits and your money would likely be better served elsewhere.
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Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.
