Rio Tinto names Shell’s Katie Jackson as new copper chief
Jackson, who is the current president of National Grid Ventures, an energy group, joins Rio Tinto on September 1.
The market for iron ore is likely to soften this year but industry leaders Rio Tinto and BHP Billiton are not pulling in production, betting that the slowdown in steelmaking is temporary.
Wall Street Journal quotes Steve Randall, managing director of The Steel Index, saying “The consensus is for a fall of $10-$15 a ton on average in 2012, to a range of $150-$160 a ton, with high volatility.”
The crucial steelmaking ingredient had a tumultuous 2011, with prices soaring to record highs above $170/tonne, only to crash to two-year lows of $116/tonne at the end of October. The price has since recovered, with spot iron ore trading close to seven-week highs last week after a cyclone closed down the world’s largest export terminal in Australia and heavy rains in three Brazilian states halted Vale’s shipments.
The price softening in 2012 is due to one main factor: China. The Asian economic powerhouse is by far the world’s largest iron ore importer, but credit-tightening measures last year have depressed demand for steel and iron ore. WSJ reports:
In November and December, China steel production fell, leaving 2011’s steel output there around 20 million tons lower than the 700 million tons originally forecast.
“That’s 35 million tons less iron ore than expected,” Mr. Randall said. This is equivalent to more than three months’ output from Vale SA’s Carajas mine in north Brazil, the largest open-pit iron-ore mine in the world.
Reuters reports that Rio Tinto and BHP Billiton, which along with Vale SA make up the Big 3 iron ore producers, maintain that despite a slowdown in Chinese steel production, sales orders to China are not weakening:
“Production and earnings are expected to highlight what remains a robust sector, even though economic uncertainties continue to drive near-term sentiment,” brokerage Nomura said in a note.
Rio is expecting to show a 25% increase in iron ore output from last quarter while BHP could be up 23%, Reuters reported.
