Iron ore exports hit a high
Rio Tinto report says inflation has peaked as exports top predictions
Rio Tinto has flagged a secondhalf recovery for the Chinese economy, as the company hit the upper end of its iron ore export guidance and shipped its biggest tonnage in five years.
The mining major, led by Jakob Stausholm, released its December quarter production report on Tuesday, saying it believed the global cycle of higher interest rates has peaked, as inflation across the world recedes.
Rio said China’s moves to offset weakness in the country’s troubled property sector were finally improving market confidence in its massive economy.
“Monetary policy in advanced economies remains tight. However, interest rates may now have peaked,” the company said in its quarterly market report. While iron ore prices have softened over the past week, the steelmaking commodity hit 21 months highs in January of about $US145 a tonne, after a strong finish to 2023 on the back of monetary policy easing in China – which lifted demand despite the country’s weak property sector, Rio Tinto said.
“Resilient infrastructure and manufacturing investment, and an increase in the automotive sector and consumer goods, helped offset the prolonged weakness in the property market. Market confidence increased following strong fiscal easing and improvement in manufacturing and consumption levels,” Rio said.
“Stimulus measures are expected to drive a gradual recovery in 2024, albeit weighted towards the second half, with the real estate sector remaining weak.”
The comments come after Rio hit the upper end of its iron ore export guidance, shipping 331.8 million tonnes of the steel commodity in 2023.
The mining giant maintained its guidance of shipping 323 to 338 million tonnes in 2024, only a slight increase on the previous year.
Rio’s iron ore shipments were up 3 per cent compared with 2022.
But the full-year production results also reflect a massive uplift in exports of lower-grade SP10 product, as Rio shipped 47.5 million tonnes of the material through the year, including 12.1 million tonnes of SP10 lump ore and 35.4 million tonnes of fines – a 56 per cent jump on 2022 volumes.
Rio has previously said that it now expects SP10 – which grades 58 to 60 per cent iron ore, below the 62 per cent average of benchmark export quality ore – to make up 13 to 15 per cent of its total exports until the company’s giant Rhodes
Ridge project enters production and restores the company’s flagship Pilbara Blend to levels of better than 85 per cent of its total shipment volumes.
Across the rest of Rio’s major divisions, aluminium output lifted 9 per cent to 3.3 million tonnes for the year, with mined copper output up 2 per cent to 620,000 tonnes as the first copper from the Oyu Tolgoi underground expansion entered the market.
Rio said it was still seeing strong performance at the giant Mongolian copper operation, as the ramp up of the underground development continues.