Saturday, July 02, 2005 8:51:18 AM
Rio Tinto's Walsh Says Chinese Iron Ore Imports Set to Rebound
July 2 (Bloomberg) -- Rio Tinto Group, the world's second- largest iron ore exporter, said Chinese imports of the commodity are set to rebound because of buoyant demand from steelmakers and declining inventories.
Iron ore imports to China, the world's biggest buyer of the mineral, fell in May to their lowest in three months after the government imposed an 8 percent duty. China has also been seeking to limit the number of companies importing the commodity.
``The word we're getting from steel mills and freight companies is that everybody sees'' the slowdown ``as a temporary correction,'' Sam Walsh, chief executive of Rio Tinto's iron ore business, said in an interview yesterday. ``The basic fundamentals of the iron ore market, and for steel, continue to be attractive.''
Surging demand from China, the world's largest steelmaker, led to a record 71.5 percent jump in iron ore prices in April. London-based Rio Tinto and rivals Cia. Vale do Rio Doce and BHP Billiton are spending a combined $8.5 billion expanding their mines, railroads and ports to meet demand.
``China's demand for iron ore continues to be strong and is expected to increase further in 2006,'' Tony Robson, an analyst at Global Mining Research in Sydney, said today. ``The licensing restrictions were targeted at the spot market, which is mainly Indian ore, and not directed at the big boys like Rio Tinto.''
China has doubled steel output in the last four years as it makes more cars, household appliances and buildings. Production will probably rise almost 20 percent to 322 million metric tons in 2005, according to the China Iron and Steel Association.
Stockpiles
The nation's iron ore imports fell to 21.8 million metric tons in May, from a record 24.3 million in April and 24.2 million in March, as steelmakers used inventories because of the new tax.
Chinese importers will run down 30 million tons of iron ore stockpiles in a month, Noble Group Ltd., which handles 10 percent of the country's shipments of the commodity, said June 22.
``Traders who were fearful of their ability to trade brought in quantities of iron ore from India and elsewhere and that created a stock buildup,'' Walsh said via telephone from Perth. ``We and many others are seeing this as a correction.''
China's iron ore imports may rise 15 percent this year to 240 million tons, the China Iron and Steel Association said on April 11. That may help prices rise a further 5 percent from April 2006, Merrill Lynch & Co said this week.
``This is a tight market for the foreseeable future,'' Brendan Harris, an analyst at Macquarie Bank Ltd. in Sydney, said yesterday. ``It's a good industry to be in.''
Rio Tinto said yesterday it agreed to take a 50 percent stake in the A$530 million ($402 million) Hope Downs iron ore mine in the Pilbara region of Western Australia. Rio Tinto gets 20 percent of its profit from iron ore.
To contact the reporter on this story:
Tan Hwee Ann in Melbourne at hatan@bloomberg.net
http://www.bloomberg.com/apps/news?pid=10000080&sid=a1pGUgTTiXAs&refer=asia
Recent FE News
- JCP&L Upgrading Morristown Substation to Reduce Power Outages • PR Newswire (US) • 07/02/2024 04:56:00 PM
- Penelec Storm Drill Focuses on Efficient Power Restoration to Customers Following Severe Weather • PR Newswire (US) • 07/02/2024 03:30:00 PM
- FirstEnergy to Webcast Second Quarter Earnings Teleconference • PR Newswire (US) • 07/01/2024 04:50:00 PM
- Mon Power and Potomac Edison Complete Inspections and Maintenance to Help Reduce Outages for West Virginia Customers This Summer • PR Newswire (US) • 06/26/2024 06:52:00 PM
- Potomac Edison Completes Inspections and Maintenance to Help Reduce Outages for Maryland Customers This Summer • PR Newswire (US) • 06/26/2024 06:44:00 PM
- Newsweek Names FirstEnergy as One of America's Greatest Workplaces in 2024 • PR Newswire (US) • 06/26/2024 01:15:00 PM
- FirstEnergy's Ohio Electric Companies Complete Proactive Work to Help Enhance Service Reliability for Customers Through Summer Season • PR Newswire (US) • 06/25/2024 01:51:00 PM
- Inspection and Maintenance Work Nears Completion in Met-Ed's Service Area to Enhance Service Reliability for Customers Through Summer • PR Newswire (US) • 06/24/2024 08:20:00 PM
- Inspection and Maintenance Work Nears Completion to Enhance Service Reliability in West Penn Power's Service Area for Customers Through Summer • PR Newswire (US) • 06/24/2024 08:20:00 PM
- Inspection and Maintenance Work Nears Completion to Enhance Service Reliability in Penelec's Service Area for Customers Through Summer Season • PR Newswire (US) • 06/24/2024 08:20:00 PM
- Inspection and Maintenance Work Nears Completion to Enhance Service Reliability in Penn Power's Service Area for Customers Through Summer Season • PR Newswire (US) • 06/24/2024 08:20:00 PM
- JCP&L Completes Inspections and Maintenance to Prepare Electric Grid for Summer Heat, Storms & Hurricanes • PR Newswire (US) • 06/24/2024 07:30:00 PM
- FirstEnergy Electric Companies Prepared to Handle Early Summer Heat Wave • PR Newswire (US) • 06/14/2024 08:30:00 PM
- New Jersey Customers Encouraged to Apply for Payment Assistance Programs During Utility Assistance Awareness Week • PR Newswire (US) • 06/11/2024 08:48:00 PM
- FirstEnergy Names Nikhil Rao Associate General Counsel, Litigation and Labor & Employment • PR Newswire (US) • 06/11/2024 03:30:00 PM
- FirstEnergy Names Stephen Avila Vice President, Customer Care • PR Newswire (US) • 06/11/2024 03:30:00 PM
- Storm Drill Helps Mon Power Employees Prepare for Severe Weather Events • PR Newswire (US) • 06/10/2024 02:27:00 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 06/05/2024 08:32:14 PM
- Annual Storm Restoration Drill Helps Electric Company Employees Prepare for Severe Weather Events • PR Newswire (US) • 06/05/2024 03:53:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 06/04/2024 11:36:47 AM
- Keeping Ohio's Lakeshore Roads Safe During Mayfly Season • PR Newswire (US) • 06/03/2024 04:30:00 PM
- FirstEnergy's Ohio Utilities Seek Review of Electric Rates to Continue Service Reliability Enhancements and Support New Customer Assistance Program • PR Newswire (US) • 05/31/2024 04:49:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 05/23/2024 10:45:28 AM
- FirstEnergy Holds 2024 Annual Meeting • PR Newswire (US) • 05/22/2024 01:20:00 PM
- FirstEnergy Names Executives to Lead State Electric Companies and Transmission Business • PR Newswire (US) • 05/21/2024 03:00:00 PM
Freedom Holdings Corporate Update; Announces Management Has Signed Letter of Intent • FHLD • Jul 3, 2024 9:00 AM
EWRC's 21 Moves Gaming Studios Moves to SONY Pictures Studios and Green Lights Development of a Third Upcoming Game • EWRC • Jul 2, 2024 8:00 AM
BNCM and DELEX Healthcare Group Announce Strategic Merger to Drive Expansion and Growth • BNCM • Jul 2, 2024 7:19 AM
NUBURU Announces Upcoming TV Interview Featuring CEO Brian Knaley on Fox Business, Bloomberg TV, and Newsmax TV as Sponsored Programming • BURU • Jul 1, 2024 1:57 PM
Mass Megawatts Announces $220,500 Debt Cancellation Agreement to Improve Financing and Sales of a New Product to be Announced on July 11 • MMMW • Jun 28, 2024 7:30 AM
VAYK Exited Caribbean Investments for $320,000 Profit • VAYK • Jun 27, 2024 9:00 AM