SMM7: Australian mining giants Rio Tinto and FMG have announced record iron ore shipments with BHP Billiton, most of them to China, as a rebound in steel production has been driven by a boom in infrastructure and real estate construction in the world's second-largest economy.
Record gains from iron ore exports, although global steel demand has been dampened by the COVID-19 pandemic and exports of other mineral raw materials such as aluminium and copper remain depressed, the report said.
Data show that Australia's iron ore shipments to China reached a record high in the first half of the year, and exports of coking coal and thermal coal to China also increased sharply, indicating that despite the relative tensions in Australia, trade between the two countries does not seem to have been disrupted much.
Rio Tinto recently reported that iron ore shipments to china increased by 3% in the first half of this year compared with the same period last year. That increased the company's earnings by 2 per cent over the same period and led the Australian mining company to promise to pay a $2.5 billion dividend to shareholders.
When FMG announced its financial results for the fourth quarter of the 2019-20 fiscal year, it forecast that iron ore shipments to China would rise 6 per cent to 178 million tons in the fiscal year to June, exceeding its annual export target of 177 million tons. The company's full-year results will be announced in a few weeks.
The mining giant also said that in the first six months of this year, China's steel production was strong, reaching 499 million tons, which boosted the company's iron ore exports, up 1.4 per cent from the same period last year.
Rio Tinto also said the steel markets in Europe, the United States, Japan and South Korea remained weak.
Rio Tinto said contract-based iron ore shipments from Australia remained strong despite the pandemic, outperforming other major mining companies, such as Brazil's Vale, which is subject to production restrictions. But its second-quarter profits also rebounded because of rising iron ore prices.
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