① Rio Tinto, the world's largest iron ore exporter, released a report saying that it is expected that the increase in China's stimulus measures will gradually recover the overall economy this year, thereby driving a recovery in iron ore demand; ② Rio Tinto also predicts that under the impetus of urbanization in India and other Asian countries, global iron ore demand is still expected to increase by nearly 25% by 2050.
Financial Services Association, January 16 (Editor Liu Rui) On Tuesday local time, Rio Tinto, the world's largest iron ore exporter, released a report saying that it is expected that the increase in China's stimulus measures will drive the overall economy to gradually recover this year, thus driving a recovery in iron ore demand.
China's economy has shown signs of stabilization
In 2023, the cumulative increase in iron ore prices was about 20%. However, due to lingering concerns about sluggish demand in China and the plight of China's real estate industry, iron ore prices have dropped by about 8% since the beginning of this year. China's economic recovery prospects have become the most important factor in determining steel demand and iron ore price trends.
Rio Tinto announced its fourth quarter results report on Tuesday. According to the report, the Chinese economy showed signs of stabilization in the fourth quarter of last year, and the increase in infrastructure and manufacturing spending offset the long-term weakness of the real estate industry.
Rio Tinto expects China's economy to rebound slowly but steadily, and the recovery window is more biased towards the second half of 2024. However, the real estate sector is expected to remain weak.
Rio Tinto CEO Jakob Stausholm (Jakob Stausholm) said in the report that the increase in China's policy stimulus measures, the reduction of anxiety about the global recession, and the general slowdown in inflation in various countries have provided support for commodity prices such as iron ore in the fourth quarter of last year.
Global demand for iron ore is still expected to grow
Rio Tinto wrote in the report that in the fourth quarter of last year, the company's iron ore production fell 2% year on year to 87.5 million tons. Furthermore, in the fourth quarter of last year, Rio Tinto's bauxite production increased 15% year on year, aluminum production increased 8% year on year, and copper production increased 5% year on year.
Throughout 2023, Rio Tinto's iron ore production reached 331.5 million tons, an increase of 2% over the previous year, reaching the second-highest in recorded history.
Rio Tinto reiterated their previous guidelines on iron ore and other mineral production in 2024: iron ore companies are expected to export between 323 million tons and 338 million tons this year; copper production is expected to rise to 66-720,000 tons this year, up from 620,000 tons last year.
Rio Tinto CEO Stauholme said in a statement: “The minerals we produce are in high demand, and our goals and long-term strategy are more meaningful than ever.”
Rio Tinto also predicts that in the medium to long term outlook, even though China is home to the world's largest steel industry, its iron ore consumption will soon peak. However, driven by urbanization in Asian countries such as India, global demand for iron ore is still expected to increase by nearly 25% by 2050.