Iron Ore Series Part 4: Product Launch

AUTHOR

Geoffrey Craig, Senior Product Strategist

We are excited to announce the launch of our latest product, a weekly dataset containing volumetric measurements of Iron Ore Stockpiles at key locations around the world, designed to provide traders and analysts with actionable information on market fundamentals.

Our measurements are based on radar satellite imagery, which can see through cloud cover, or dark of night, and track minute topographical changes over a broad area – all of which ensure greater reliability and accuracy.

At present, our coverage includes portside stockpiles at five locations:

  • Port Hedland, Australia
  • Saldanha Bay, South Africa
  • Ponta da Madeira, Brazil
  • Qingdao, China
  • Caofeidian, China

The locations are considered major iron ore trade hubs. Australia, Brazil and South Africa are the world’s top three exporters, while China ranks as the largest importer.

Ponta da Madeira 4/22/23 Google Earth

Radar satellite imagery is collected over the locations every week. We then apply a proprietary algorithm to estimate the dimensions of the pile (i.e. length, width, height), which are converted into a volumetric measurement denominated in cubic meters.

What emerges from the data is a clearer picture of the iron ore market, similar to the role played by Ursa’s Global Oil Inventories product.

Stockpiles will rise or fall based on the supply-demand balance. A trend analysis reveals whether market conditions are persistently oversupplied or undersupplied, which has implications for iron ore prices.

For instance, if China’s smelters are preparing to increase output, then additional iron ore is required, which will likely come from stockpiles, causing them to diminish until more imports arrive or drawdowns slow.

On the supply side, heavy rains can disrupt mining operations, which means less iron ore arrives at ports where ships load exports from. Iron ore stockpiles can be drawn down to honor export commitments, though only for so long. Eventually, export volumes will drop. 

These examples show how stockpile data provides valuable insight that traders can incorporate with greater confidence than relying on news stories covering topics, such as bulk carrier movements, China’s planned spending on construction projects or weather reports. 

 

Beta Users

To better visualize the product, we created a 3D reconstruction of an iron ore stockpile in Ponta Madeira, Brazil using radar satellite imagery collected on December 19 and December 24, 2023.

The video below shows a single pile at Ponta Madeira. You can see the change in its shape from one date to the next. The pile grew by 35% to 32,898 cubic meters.

We measure each pile, including the one shown here, and then aggregate the data across each location to provide a time series dataset. Reports are delivered every Thursday. 

Our Beta period recently began. It lasts until the end of February, but we’re still accepting Beta users prior to the full launch in March. 

Feedback is invaluable as we continue to enhance the product. Let us know if you’re interested.

Other articles in this series:

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