Rio Tinto Group said second-quarter shipments of iron ore fell 1pc from a year earlier, as China’s faltering economic recovery continued to weigh on demand.
The world’s biggest iron ore producer shipped 79.1 mln tons of the steelmaking ingredient in the three months to June 30. While it left full-year export guidance for its core product unchanged, it trimmed output forecasts for alumina and refined copper.
Commodity-exporting heavyweights including Rio Tinto and Vale SA are being closely watched for insights on a slowdown in China that could have significant ripple effects across the global economy. The biggest metals-consuming nation’s disappointing post-pandemic recovery and persistent property woes have put downward pressure on steel demand and iron ore prices.
“China’s economic recovery has fallen short of initial market expectations, as the property market downturn continues to weigh on the economy and consumers remain cautious despite monetary policy easing,” Rio Tinto said in a statement. The steel demand recovery in the nation encountered “persistent headwinds” in the second quarter, it said.
Iron ore prices, which have staged a partial recovery since late May, could come under more pressure due to an increase in shipments from Vale. Output from the Brazilian miner, the world’s No. 2 iron ore supplier, rose more than 6pc last quarter.
Rio Tinto said it expects full-year iron ore shipments to be in the upper half of its 320 to 335 mln ton range. It lowered alumina full-year production guidance to 7.4 mln tons to 7.7 mln tons from as much as 8 mln tons previously, and refined copper to 160,000 to 190,000 tons from as high as 210,000 tons.
“Production downgrades during the quarter highlight that we still have much more to do,” Rio Tinto Chief Executive Officer Jakob Stausholm said in the statement.
Rio Tinto said negotiations over the co-development of the massive Simandou iron ore project in Guinea, in which it has a joint stake with Chinese producers and the government of the West African nation, continued to show progress but gave no production timeline.
