Rio Tinto sees signs of stabilisation in Chinese | Market wire

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Rio Tinto, the Anglo-Australian miner, has pointed to “signs of stabilisation” within the Chinese language property market after weak demand from the nation’s construction sector hit the price of iron ore final yr.

Demand from Chinese language metal mills has pushed growth for international miners over the previous decade, however weak point within the housing market over the previous yr has triggered volatility within the iron ore price, which dropped 8 per cent during the fourth quarter, in line with Rio.

Miners together with Rio and BHP have mentioned commodity demand in China has shifted in direction of manufacturing, renewable power and electric automobiles.

Rio mentioned in a manufacturing replace on Thursday that the Chinese language financial system supplied “mixed signals” during the period due partly to “headwinds” from the property market.

Nevertheless, the report pointed to November knowledge on home gross sales and costs as exhibiting “signs of stabilisation” and mentioned there have been additional enhancements in demand from the manufacturing and shopper sectors following authorities stimulus programmes to spice up consumption.

The company mentioned China’s crude metal manufacturing recovered as exports partly offset weak home demand.

The outlook comes forward of the release of Chinese language financial knowledge on Friday.

Extra broadly, Rio mentioned the outlook for the US financial system remained steady, in distinction to Europe, the place the financial outlook continued to be unsure resulting from uneven growth and subdued consumption.

“Persistent manufacturing weakness and cross-country divergence make a strong recovery unlikely,” mentioned Rio.

Rio is the primary of the big international miners to replace the market in 2025. Jakob Stausholm, chief government, mentioned there had been robust progress in delivering natural growth from the company’s main tasks, together with its Mongolian copper mine Oyu Tolgoi, its Rincon lithium project in Argentina and the Simandou, an iron ore deposit in Guinea. 

Rio’s iron ore manufacturing dropped 1 per cent yr on yr to 85.7mn tonnes within the fourth quarter. The company warned of larger prices throughout its Pilbara operations in Western Australia. Copper manufacturing grew 26 per cent on the back of its Mongolian project.

RBC Capital Markets mentioned the fourth-quarter replace supplied a “solid” finish to the yr, with bauxite and aluminium manufacturing forward of expectations.

Rio mentioned in December its investments in new tasks would drive compound annual growth of 3 per cent within the manufacturing of copper, iron ore and lithium over the following decade.

The world’s largest miners have been in a race to spice up their publicity to metals and minerals needed for the power transition, together with copper and lithium.

Rio paid $6.7bn in money to accumulate lithium group Arcadium in October.

In the meantime, BHP — which tried to buy Anglo American final yr to spice up its copper publicity — mentioned on Thursday it had accomplished the acquisition of Filo Corp, a Canada-listed miner with copper tasks in South America.

BHP, which paid $2bn for its share of Filo in a joint deal with Canada’s Lundin Mining, mentioned it was “an exciting new copper growth opportunity”.