Rio Tinto Sees Strong Demand for High-Grade Iron Ore in 2021 -- Commodity Comment
February 17 2021 - 2:06AM
Dow Jones News
By Rhiannon Hoyle
Rio Tinto PLC, the world's second-biggest mining company by
market value, Wednesday reported a 22% rise in full-year net profit
largely linked to higher iron-ore prices. Here are some remarks
from that report.
On iron-ore demand:
"The Covid-19 pandemic had a disparate impact on iron ore demand
in 2020, where solid growth in China's imports more than offset the
contractions in all other regions. Scrap collection and
availability were significantly disrupted by the pandemic, further
supporting iron-ore demand at a time when extreme weather events
constrained supply from the major producing regions."
On the outlook for iron-ore concentrate:
"Due to robust demand and global supply constraints, the market
for iron-ore concentrate and pellets was strong throughout the
year. This is expected to continue into 2021 as more steel
producers requiring high-grade, low impurity pellets increase
production and global supply constraints persist."
On the aluminum market:
"Demand for primary aluminium declined by around 3% in 2020,
following a fall of around 1% in 2019. Covid-19 severely impacted
consumption this year, but with notable regional differences in
recovery rates: gradual in the developed world, with China
experiencing a strong V-shaped recovery. Demand in the transport
sector has been especially weak in 2020, but robust in the
packaging sector. We expect overall demand to rebound in 2021, but
ongoing COVID-19 restrictions and political risks remain."
On the bauxite market:
"China continues to drive demand in the global seaborne bauxite
market as result of stricter environmental measures and the
depletion of domestic bauxite. Chinese bauxite imports rose by
around 11% to 112 million tonnes in 2020 on the back of increased
imports from Guinea, Australia and Indonesia."
On the copper market:
"Prices reached a 7-year high of 361 U.S. cents per pound in
December 2020, over 70% higher than the low earlier in the year, as
net-long investor positions (on Comex and LME) reached the
equivalent of 2 million tons. However, the rate of recovery in
growth is slowing in many economies and the rise of renewed
lockdowns threatens the recovery. Policy direction in the
medium-term indicates a strong copper-intensive outlook with the
continued rise of electric vehicles, potential green stimulus
packages around the world and the Chinese push for carbon
neutrality by 2060."
On the titanium-dioxide market:
"Underlying demand for titanium dioxide pigment fell sharply in
the second quarter of 2020 leading to a deterioration of feedstock
demand by the middle of 2020. Leading indicators suggest a recovery
in 2021. Structural factors remain favourable for high-grade
titanium dioxide feedstock and zircon supply."
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
(END) Dow Jones Newswires
February 17, 2021 01:51 ET (06:51 GMT)
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