Rio Tinto says global economy resilient, inflation easing despite patchy China
Rio Tinto says the global economy is resilient and inflation is trending down despite China’s patchy recovery, energy prices and shipping costs remaining volatile, and shipments of iron ore falling over the past three months as bad weather disrupted its ports.
The mining giant says iron ore depletion at its Pilbara operation saw output of the key steelmaking ingredient – one of Australia’s largest exports – fall 2 per cent to 77.9 million tonnes over the first quarter. Shipments, at 78 million tonnes, were 5 per cent lower than in the first quarter last year.
The Simandou mountains in Guinea contain high-grade iron ore.Credit: Rio Tinto
“Lower volumes were predominantly the result of weather disruption at the ports, leading to a lower stock drawdown compared to last year, as well as reduced production at the mines,” the dual UK and Australia-listed company said.
Rio said its full-year forecasts stay unchanged across all its mineral products.
“The global economy remains resilient, despite the aggressive policy rate hikes in the past two years, with a recovery in industrial production ahead. Inflation is trending downwards, but slower than expectations, as energy price risks and shipping-cost volatility remain. Labour markets are still resilient,” the miner said in a quarterly update.
Its outlook for the US was “optimistic”. The eurozone stagnated last year and is likely to stay weak at the start of this year, but would pick up gradually as inflation declines and industrial production and investment in the energy transition increase, Rio said.
China, the world’s largest producer and consumer of steel, is battling a severe property slump, but both Rio and its larger rival BHP have previously reported the country’s manufacturing sector is strong, increasing production and exports.
“China’s domestic steel demand trended at levels similar to last year, but steel exports rose 30 per cent year-on-year during the first two months and are likely to remain historically elevated, in turn, supporting iron ore demand,” the company said.
