RIO Rio Tinto Plc

   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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