Rio Tinto Iron-Ore Chief Says Prices Down Amid Subdued Demand From Steel Makers
December 04 2015 - 4:08AM
Dow Jones News
By Stephen Bell
PERTH, Australia--Subdued demand for iron ore from China's
steelmakers, which are stocking up their raw-material inventories
at an unexpectedly slow pace heading into year-end, has helped to
push prices to a decade low, the head of iron ore at Rio Tinto Ltd.
(RIO.AU) said on Friday.
"The restocking in China usually occurs around this time of the
year and that's not running at the rates that people would have
expected, and that you've seen in the last few years," Andrew
Harding told reporters on the sidelines of an industry gathering in
Perth.
"That is one of the things that is actually underpinning some
current price weakness," he said, referring to the slump in prices
to roughly US$40 a metric ton on Thursday. Spot iron ore peaked
above US$190 a ton in early 2011.
China's steelmakers typically stock up on raw materials entering
the northern hemisphere winter, before cold temperatures have the
potential to disrupt trade.
A slump in steel prices is also making China's steelmakers more
cautious about holding too much ore, he said.
Still, Rio Tinto--Australia's biggest exporter of the industrial
commodity--is selling every ton of the commodity that it produces,
Mr. Harding said.
Rio Tinto remains positive on the long-run outlook for demand,
thanks to rising populations and wealth in Asia, according to Mr.
Harding, who meanwhile said he is hopeful that the company's board
will approve development of its proposed new Silvergrass mine in
Western Australia next year.
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(END) Dow Jones Newswires
December 04, 2015 03:53 ET (08:53 GMT)
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