Rio Tinto Says Demand for China Iron-Ore Portside Trading Strong -- Commodity Comment
October 16 2023 - 8:14PM
Dow Jones News
Rio Tinto, the world's second-biggest miner by market value, on
Tuesday reported higher third-quarter aluminum and mined copper
production year-on-year, and downgraded full-year output guidance
for its Iron Ore Company of Canada business. Here are some remarks
from its third-quarter results.
On China iron-ore portside trading:
"We continue to see strong demand for Rio Tinto's portside
product in China. Our iron-ore portside sales were 17.5 million
tons in the first nine months of 2023 (19.5 million tons in the
first nine months of 2022). At Sept. 30, inventory levels were 6.3
million tons, including 3.1 million tons of Pilbara product. In the
first nine months of 2023 approximately 87% of our portside sales
were either screened or blended in Chinese ports."
On its Pilbara iron-ore operations:
"We produced 83.5 million [metric] tons (Rio Tinto share 70.9
million tons) in the third quarter, 1% lower than the corresponding
period of 2022. Shipments of 83.9 million tons (Rio Tinto share
71.7 million tons) were 1% higher than the third quarter of 2022,
and 6% higher than the prior quarter. SP10 was a larger proportion
of shipments during the third quarter (17%), and are expected to
remain elevated in the next period.
Shipments in the first nine months of 2023 were 5% higher than
the first nine months of 2022 reflecting improved performance
across the Pilbara system, ramp up of our Gudai-Darri mine and an
uplift in productivity from implementation of the Safe Production
System. We continue to expect full-year shipments in the upper half
of the original 320 to 335 million-ton range, which includes a 5
million-ton benefit from the implementation of the Safe Production
System. SP10 volumes are expected to account for 45 to 50 million
tons of 2023 shipments (13% to 15%)."
On aluminum production:
"Aluminium production of 0.8 million tons was 9% higher than the
third quarter of 2022 as we returned to full capacity at our
Kitimat smelter and completed cell recovery efforts at our Boyne
smelter. With Kitimat back at full capacity, we are focused on
improving stability and removing associated start-up costs to
normalize profitability of the smelter. All our other smelters
continued to demonstrate stable performance during the
quarter."
On Kennecott copper operation:
"Mined copper production was 4% lower than the third quarter of
2022 as the concentrator returned to full capacity during the
period, recovering from the conveyor failure which occurred in
March 2023. Refined copper production was 53% lower than the third
quarter of 2022 as we completed the largest rebuild of the smelter
and refinery in Kennecott's history during the quarter."
On Escondida copper operation:
"Mined copper production was 5% higher than the third quarter of
2022 driven by higher copper feed grades combined with increased
sulphide leach stacking volumes. Refined production was 5% higher
than the third quarter of 2022 due to improved oxide leach
performance."
On Oyu Tolgoi copper operation:
"Mined copper production on a 100% basis increased 16% from the
third quarter of 2022 as the ramp-up in underground production
continued to plan, delivering higher average copper head grades
(0.52% versus 0.42%). During the quarter we delivered 0.9 million
tons of ore milled from the underground mine at an average copper
head grade of 1.73%, and 8.8 million tons from the open pit with an
average grade of 0.39%."
On Iron Ore Company of Canada:
"Iron-ore production was 14% lower than the third quarter of
2022, as operations were impacted by extended plant downtime and
conveyor belt failures, while we also recovered from wildfires
which took place in Northern Quebec in the prior quarter. Given
these challenges our full-year production guidance has been reduced
to 9.3 to 9.8 million tons (previously 10.0 to 11.0 million
tons).
Shipments were 17% lower than the third quarter of 2022, driven
by lower production. Logistics have resumed full operations
following the wildfires, however disruptions remain a risk as we
repair areas of the rail line damaged by fire."
On iron-ore market:
"Iron-ore prices rose by 7% during the quarter, lifting the
average 62% Fe CFR China price to $114 per dry ton, up 3%
quarter-on-quarter. China's domestic steel demand is up 1%
year-to-date to August 2023 despite continued weakness in
residential property, while a 40% spike in net steel exports lifted
crude steel production and iron-ore imports by 4.5% and 5%,
respectively. This, coupled with headwinds to China's domestic iron
ore production, led to portside iron-ore inventories declining to a
three-year low of 114 million tons at the end of the quarter,
despite the [circa] 8 million-ton quarter-on-quarter increase in
seaborne iron-ore supply."
On aluminum market:
"The LME cash aluminum price rose by 10% over the quarter,
although the $2,154/ton average price was 5% lower than the second
quarter. Smelter restarts in Yunnan were completed, lifting Chinese
production, but reported Chinese inventories remained low, due to
strong demand driven by solar modules construction. However,
aluminum shipments and orders, in the U.S., Europe and Japan,
except for the transport sector, remained weak. Meanwhile,
declining raw materials costs eroded cost support for
aluminum."
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
(END) Dow Jones Newswires
October 16, 2023 19:59 ET (23:59 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.
Rio Tinto (ASX:RIO)
Historical Stock Chart
From Jul 2024 to Aug 2024
Rio Tinto (ASX:RIO)
Historical Stock Chart
From Aug 2023 to Aug 2024