After a volatile start to the year, Rio Tinto expects global iron ore prices to stabilise in the September quarter and expects only a small change in the quarterly price。

    Rio Tinto , the world's second-largest iron ore producer, expects global prices to stabilise in the September quarter after a volatile start to the year and sees only a small change in its quarterly price. Rio Tinto expects iron ore prices in the September quarter to vary by only around 1 percent compared with the June quarter, Sam Walsh, the firm's iron ore chief told Reuters on Thursday, underscoring a tight supply and demand balance. "We are seeing continuing growth in the market," he said on the sidelines of a meeting with Treasurer Wayne Swan, referring to global demand for the steel-making raw material. Walsh's assessment of market conditions is in contrast with signs of slow buying from top consumer China as steel mills there work off stockpiles of ore amid a slow down in steel shipments."(Price movements) indicate that we will continue with very high prices which really are signifying that the market continues to be tight," Walsh said."The prices for the next quarter look like they will be within one percent of current prices," he added.    Chinese steelmakers had been banking on a resurgence in construction in the second quarter to boost demand for steel but tighter liquidity, thanks to Beijing's inflation-taming campaign, has slowed down property projects.Iron ore prices have tumbled from a 2011 peak of around $191 a tonne in February to a current price of around $176 a tonne .IO62-CNI=SI. In March prices fell below $165 a tonne.   

    Walsh said Rio Tinto was on track to boost its output of iron ore to around 230 million tonnes in 2011 from around 200 million last year as it expands its mines. By 2013, he forecast the company's output would climb to 283 million tonnes, then 333 million two years after that. Rio Tinto mines the majority of its ore in the Pilbara region of Australia, making it the world's no.2 producer behind Brazil's Vale .Australia's other big iron ore miners are BHP Billiton , and Fortescue Metals Group . The system whereby prices are set every three months based on average spot prices over the preceding quarter was spearheaded by BHP Billiton and quickly adopted by other producers in lieu of the now-defunct policy of only pricing ore once a year.Steel mills,particularly in China, fought against the shift, but eventually had no choice but to accept the new regime given the dominance in supply wielded by a small number of large producers. (Additional reporting by Jim Regan; Editing by Balazs Koranyi)Thomson Reuters 2011 All rights reserved.

 

Iron ore prices to stabilise in Q3 - Rio Tinto

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