(Sharecast News) – Anglo-Australian mining giant Rio Tinto warned of a broader global economic slowdown on Wednesday, driven by China’s stumbling recovery from the Covid pandemic, as it posted a slight fall in iron ore shipments for the second quarter.
The company said annual iron ore production should be at the upper end of expectations, but said prices had fallen during the quarter on worries over China’s troubled property sector, depressing demand for the key commodity.
“China’s economic recovery has fallen short of initial market expectations, as the property market downturn continues to weigh on the economy and consumers remain cautious despite monetary policy easing,” Rio Tinto said.
“Manufacturing data in advanced economies showed a further slowdown and recessionary risks remain.”
Rio, the world’s biggest iron ore producer, shipped 79.1 million metric tons of iron ore in the three months to June 30, down slightly from a year earlier.
It also downgraded its expectations for refined copper production, alumina production, and output at its Canadian iron ore operations and warned of rising costs.
“Production downgrades during the quarter highlight that we still have much more to do,” said chief executive Jakob Stausholm.
Rio cut its refined copper guidance by about 10% to 160,000 to 190,000 metric tons and raised its cost guidance due to a smelter rebuild at its Kennecott operations in Utah that has also been delayed by a month.
Wildfires in Northern Quebec hit iron ore production in Canada and the company is also reviewing the $140 estimate and development timeline for its Rincon lithium project in Argentina due to rising costs.
Reporting by Frank Prenesti for Sharecast.com