Rio Tinto Group, the world’s biggest iron ore producer, has brushed off concerns about falling steel demand in China, saying the Asian nation’s overall economic outlook is good.
(Bloomberg) — Rio Tinto Group, the world’s biggest iron ore producer, has brushed off concerns about falling steel demand in China, saying the Asian nation’s overall economic outlook is good.
“The bottom line is there is demand for steel because China is growing,” Chief Executive Officer Jakob Stausholm said at a media conference in Perth on Thursday. Chinese economic activity would offset weaker demand in the rest of the world, which was “in a difficult spot with regards to growth,” he added.
Iron ore prices have slumped almost 25% since reaching a year-to-date high close of $132.18 a ton in March, as China’s economic activity disappointed traders expecting a post-Covid Zero surge. The steelmaking ingredient dipped below $100 in Singapore Thursday.
But Stausholm said the iron ore price was “actually well higher than it was in October” last year, when it went below $80. “So we saw a massive increase and then we’ve seen a little fallback,” he said.
“What you’ve seen in the last few weeks is that a number of steel mills have taken the opportunity to make a little shutdown, and do whatever you have to do during a shutdown, because the steel markets have been very low,” Stausholm said. “There might be a little bit less use for iron ore for now, but that might come back in a month or two. So I’m not too worried about that.”
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.