SINGAPORE – Iron-ore shipments from Australia’s Port Hedland, the world’s largest bulk export-terminal, expanded to the third-highest level on record, signalling that a global surplus is set to persist.

Exports totaled 39.4-million metric tons last month from 37.7-million tons in April and 38-million tons a year earlier, according to data from the port authority. Shipments were a record 39.5-million tons in March.

Cargoes to China were 31.7 million tons in May compared with 32.6-million tons in April and 31.7-million tons in May 2015.

Goldman Sachs Group said it expected a growing surplus of seaborne supply in the coming months to pummel prices, according to a May report.

Benchmark prices sank back below $50 last week to the lowest since February on concern that profit margins at China’s steel mills are again tumbling, hurting the outlook for iron-ore demand just as miners continue to add supply.

“Australia’s exports have been steady at high levels and will probably remain so for the rest of 2016 as miners boost output,” Wu Zhili, an analyst from Shenhua Futures, said by phone before the data.

“This may add to signs of a swelling glut in China, where demand is past the seasonal peak. Exports may continue to push up port inventories in China.”

PORT STOCKPILES
Iron-ore posted the biggest monthly loss in about five years in May, sinking 24%, according to  Metal Bulletin. Ore with 62% content in Qingdao rose 2.1% to $51.11 a dry ton on Monday. That’s still well shy of April’s high of $70.46 a ton.

Port Hedland handles cargoes for miners including BHP Billiton, Fortescue Metals Group and new entrant Roy Hill Holdings. Shipments through the port represented 58% of Australia’s total iron-ore exports last year.

Port inventories in China have increased 7.7% this year to 100.25-million tons last week, near the highest since December 2014, according to data from Shanghai Steelhome Information Technology. BHP forecast last month there may be further increases.

Demand from China has been stronger than expected amid government efforts to prop up the economy, according to Citigroup, which has raised its price forecasts for the raw material. Iron-ore will trade at $48 a ton in the third quarter and $46 in the final three months, compared with previous estimates of $46 and $38, the bank said Tuesday.