Iron ore as a pillar: industry giants rely on Chinese steel production
The British-Australian mining concern Rio Tinto expects stable demand for iron ore in China. This was stated at a recent professional conference of Bank of America by the chief executive officer of the company, Jacob Stausholm, according to Kallanish.
In his opinion, despite the uncertainty in the global economy, the Chinese economy is in better shape than it was an hour ago. In part, the country has been successful in its response to the energy transition, and there are also many innovations in the development of electric vehicles.
Stausholm said that the company's business in China is holding up well amid stable growth, and demand for iron ore in the country increased in the first quarter of this year.
He also noted stable demand for iron ore from the rest of the world, and a number of developing countries are approaching the curve of steel production intensity.
In addition, Rio Tinto expects to ship its first iron ore from the Simandou project in Vinay in November this year, Gerard Reinberger, managing director of Simandou, said last week.
At the same time, the Australian BHP Group believes that its iron ore-regulated commodity portfolio, despite economic uncertainty, including high tariffs and unstable global trade conditions, is able to support different scenarios, writes Australian Resources & Investment.
In particular, BHP Chief Executive Officer Mike Henry at the Bank of America conference recalled the stable outlook for ore, supported by stable steel production in China and a significant source of cheese reserves.
According to him, China intends to maintain steel production at the level of 1 billion tons over the next few years. The source of reserves also has a major impact on the dynamics of the market – independent consultants estimate it at 250 million tons by 2035.
BHP expects that these fundamental supply factors, combined with strong producer exposure at the top of this curve, will support prices in the medium term.
BHP's chief executive also noted that the company's Western Australian iron ore mining (WAIO) business will continue to deliver strong profitability and cash flow going forward.