Rio Tinto lifted its shipments of iron ore during the March quarter, thanks to solid demand from China and recovering demand from Japan, South Korea and other markets.
Rio said in its first-quarter production and sales report that iron ore exports had risen by 7% compared to the same time last year, with 77.8 million tonnes pushed through its two ports in the WA Pilbara.
The miner’s quarterly performance (which mostly were within market forecasts) has left it on track to meet unchanged guidance for 2021 of 325 million and 340 million tonnes of exports.
Production in the quarter of 76.4 million tonnes was down 2% thanks to wetter than forecast weather in the Pilbara in February in particular
Rio CEO, Jakob Stausholm said the miner had achieved an “overall solid” operating performance in the first quarter and had successfully managed the effects of significant rainfall across its iron ore assets in Western Australia’s Pilbara.
Globally, Rio Tinto said it expected “robust” economic growth in the near term, fuelled by strong fiscal spending and the roll-out of vaccines as the year progressed.
Rio said its bauxite production of 13.6 million tonnes was 2% lower than the first quarter of 2020 due to wet weather in Eastern Australia. The port at the Amrun mine closed for 14 days due to large swells and cyclones. Full year bauxite guidance remains unchanged.
Aluminium production of 800,000 tonnes was 3% higher than the first quarter of 2020, with the Becancour smelter, Quebec operating at full capacity and Kitimat, British Columbia nearing the end of its pot relining cycle.
Rio said that mined copper production of 120,500 tonnes was 9% in the first quarter lower than the three months to March in 2020, with lower recoveries and throughput at Escondida in Chile and Kennecott in the US partly offset by the anticipated higher grade from the Oyu Tolgoi open pit in Mongolia.
“Kennecott saw a marginal increase in head grade as it begins the transition into higher grades from the south wall ore, with grades expected to gradually increase through 2021. Oyu Tolgoi shipments have been affected by Chinese border restrictions due to increased cases of COVID-19 in Mongolia. We continue to work closely with authorities and our customers to manage the risk of supply chain disruptions,” Rio told the ASX in the statement.
Titanium dioxide slag production of 279,000 tonnes was 5% lower than 2020 due to a planned furnace rebuild at the Rio Tinto Fer et Titane (RTFT) metallurgical complex in Quebec.
Production of pellets and concentrate at Iron Ore Company of Canada was 8% lower than 2020 due to the impacts of weather, loading unit availability on mine feed and reduced concentrator mill availability. There was a fire at one of the two reclaimers at the port on 31 March. Full year production guidance remains unchanged.
Rio shares ended at $120.20 for a modest loss of half a per cent.
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In iron ore news, while the price of 62% Fe rose to nine year highs on Monday and attracted all the attention from Australian investors and analysts, they once again ignored the continuing surge to all-time record highs for the 65% Fe product from Brazil.
62% Fe fines it their highest level since September 2011 on strong demand ahead of the Labour Day holiday on May 1.
The 62% Fe product rose $US3.37 or 1.9% to $181.80 a tonne according to Fastmarkets, but the 65% product jumped $US5.20 or just under 2.5% to the all-time high of $US216.60 (from the previous record of $US211.10 last Thursday and Friday).
The price of 58% Fe fines also rose by $US3.91 a tonne to $US157.49.
Despite the rise, the premium for 62% Fe fines over the 58% product was almost $US59 a tonne which is almost a high.
The premium in favour of 62% Fe fines over 58% was more than $US24 a tonne while the premium for 65% Fe fines and 62% was $US34.50.
Despite the headlines about the strength in iron ore prices, the real story is the way Chinese steel mills have chased the higher grade 65% Fines to reduce pollution emissions and improve crude steel yield.
