Rio reassures CISA about 2022 iron ore shipments

Rio Tinto, Australia's top iron ore miner, has told senior officials at the China Iron and Steel Association (CISA) that it will maintain steady iron ore shipments in 2022 and ensure supply to China's steelmakers, according to a February 16 post on CISA's website.

The reassurance was given by Simon Farry, Rio's vice president of sales and marketing, during a video meeting on February 14 with Luo Tiejun, CISA's vice chairman, the CISA post said. The meeting was held to discuss Chinese steel industry conditions, the status of Rio's production and sales, and recent trends in the global iron ore market.

Presenting Rio's recent iron ore production totals and business plans, Farry restated that his company's Pilbara iron ore shipments guidance for 2022 is 320-335 million tonnes, CISA said.

According to CISA, Farry agreed that iron ore prices should be decided by real demand and supply and pledged that Rio will continue to operate spot iron ore trading to support open and transparent price formation. The company will also do its best to meet China's iron ore demand for both quality and quantity, Farry reportedly said.

During the meeting, Luo remarked that violent fluctuations in ore prices are not conducive to the development of the industrial chain and do not serve the long-term interests of all parties. Luo said that CISA hopes Rio will continue to take the raw materials demand of China's steelmakers into account, ensure that long-term contracts are honoured, and jointly maintain a healthy and stable market order with China's steel industry.

The meeting followed soon after a series of announcements from China's central government aimed at quelling surging iron ore prices, as Mysteel Global reported.

Last week, the National Development and Reform Commission and the State Administration for Market Regulation had held discussions with related iron ore price information providers, and dispatched teams to jointly conduct market supervision surveys among related commodity exchanges and major iron ore ports.

On February 15, the two government bodies also held a meeting with iron ore traders to determine iron ore port inventories currently held by them and their status of trading operations in both the physical and futures markets. The traders were warned not to fabricate or publish any false price information, undertake "malicious" speculation, hoard materials or gouge prices, as reported.

Over the past several days, China's iron ore markets have calmed amid the frequent warnings from the central government, and prices have dropped from their previous highs.

Mysteel SEADEX 62% Australian Fines, for example, had declined to as low as $136.65/dmt CFR Qingdao, East China's Shandong province by February 15, from the price's near 5.5-month high of $153.55/dmt recorded on February 10. By February 16, it had only recovered slightly to $139.95/dmt.

Written by Victoria Zou, zyongjia@mysteel.com

This article has been published under an article exchange agreement between Mysteel Global and SteelMint