A powerful Category 5 tropical cyclone, named Zelia, is bearing down on Western Australia's Pilbara region, prompting the closure of key ports and raising concerns about significant damage. The storm's impending landfall has disrupted iron ore shipments, liquefied natural gas (LNG) operations, and oil and gas activities, impacting global commodity markets.

The Pilbara Ports Authority announced the closure of the ports of Dampier and Varanus Island at 6 p.m. on Thursday, February 13. These ports serve as crucial export points for iron ore, primarily from Rio Tinto's operations, and are vital hubs for oil and gas processing. This follows Wednesday's closure of Port Hedland, the world's largest iron ore export terminal, utilized by major players like BHP Group, Fortescue Metals Group, and Hancock Prospecting. The simultaneous closure of these three key ports has created a significant bottleneck in iron ore shipments.

The Bureau of Meteorology (BOM) has classified Zelia as a Category 5 storm, the highest level, with wind speeds exceeding 280 kph (174 mph). The cyclone is projected to make landfall on Friday in the remote Pilbara region. Western Australia's Department of Fire and Emergency Services is urging residents to heed emergency service directives, emphasizing the potential for severe damage to life and property. Darren Klemm, the department's head, highlighted the particular vulnerability of Port Hedland due to its older infrastructure. He noted that a shift in the cyclone's track eastward could bring a significant impact to the port.

The impact of Zelia extends beyond iron ore. Shell has postponed LNG offtakes from its Prelude floating LNG production facility off Western Australia until at least February 16th due to challenging conditions. Woodside Energy, which operates the Pluto LNG and North West Shelf LNG plants, has also implemented precautionary measures to protect its personnel and assets. The storm's presence has injected uncertainty into the energy market, raising concerns about potential supply disruptions.

James Ashley, the BOM's Western Australia manager, emphasized the rarity of storms of Zelia's intensity, noting that the last comparable cyclone occurred in April 2023. The combined impact of the port closures and disruptions to LNG operations underscores the vulnerability of the region's critical infrastructure to extreme weather events.

The port closures are expected to have ripple effects throughout the global supply chain. Iron ore prices could see volatility as traders assess the duration of the disruptions and the potential impact on supply. The delays in LNG shipments could also affect energy markets, particularly in Asia, which relies heavily on Australian LNG exports.