Chinese steelmakers are ramping up blast furnace output and pushing imports of the key steelmaking mineral iron ore to record highs, in a sign of a recovery in commodity markets that has boosted mining giant Rio Tinto’s sprawling Pilbara Pilbara) mine outlet.
Rio TintoAustralia’s largest iron ore producer said higher mine output and lower existing stocks meant it shipped 82.5 million tonnes of ore in the three months to March, a record for the first quarter and higher than a year earlier. 16% out.
China’s recovery is stimulating domestic consumption and supporting iron ore prices.Credit: Bloomberg
Chinese steelmakers boosted blast furnace capacity utilization to more than 90%, a seasonal record. The Asian powerhouse is by far the world’s largest consumer of iron ore, a key ingredient in steelmaking, Rio de Janeiro’s most profitable commodity and one of Australia’s biggest single exports.
China’s recovery is stimulating domestic consumption and supporting iron ore prices, which rose 8% to an average of US$125 ($186) a tonne in the March quarter.
Inventories at Chinese ports once exceeded 140 million tons, but fell back to the same level as at the beginning of the year, around 130 million tons.
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The mining giant said a strong U.S. labor market and spending and falling gas prices in Europe were supporting its economy, but it highlighted uncertainty ahead as interest rates rose and the fallout from the banking crisis lingered.
“Given the lagged effects of tightening monetary policy [in the US], the risk of a recession later this year remains, as consumer spending could be constrained by rising interest rates and drying up savings. The euro area economy continues to be challenged by weak manufacturing activity and high core inflation,” the firm told investors.
The Anglo-Australian mining giant lowered its production guidance for copper output to between 5.9 million and 640,000 tonnes, from a previous estimate of 6.5 million to 710,000 tonnes.
