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Rio Tinto, the Anglo-Australian miner, has pointed to “signs of stabilisation” in the Chinese property market after weak demand from the country’s construction sector hit the price of iron ore last year.
Demand from Chinese steel mills has driven growth for global miners over the past decade, but weakness in the housing market over the past year has triggered volatility in the iron ore price, which dropped 8 per cent during the fourth quarter, according to Rio.
Miners including Rio and BHP have said commodity demand in China has shifted towards manufacturing, renewable energy and electric vehicles.
Rio said in a production update on Thursday that the Chinese economy provided “mixed signals” during the period due partly to “headwinds” from the property market.
However, the report pointed to November data on home sales and prices as showing “signs of stabilisation” and said there were further improvements in demand from the manufacturing and consumer sectors following government stimulus programmes to boost consumption.
The company said China’s crude steel production recovered as exports partly offset weak domestic demand.
The outlook comes ahead of the release of Chinese economic data on Friday.
More broadly, Rio said the outlook for the US economy remained stable, in contrast to Europe, where the economic outlook continued to be uncertain due to uneven growth and subdued consumption.
“Persistent manufacturing weakness and cross-country divergence make a strong recovery unlikely,” said Rio.
Rio is the first of the large global miners to update the market in 2025. Jakob Stausholm, chief executive, said there had been strong progress in delivering organic growth from the company’s major projects, including its Mongolian copper mine Oyu Tolgoi, its Rincon lithium project in Argentina and the Simandou, an iron ore deposit in Guinea.
Rio’s iron ore production dropped 1 per cent year on year to 85.7mn tonnes in the fourth quarter. The company warned of higher costs across its Pilbara operations in Western Australia. Copper production grew 26 per cent on the back of its Mongolian project.
RBC Capital Markets said the fourth-quarter update provided a “solid” end to the year, with bauxite and aluminium production ahead of expectations.
Rio said in December its investments in new projects would drive compound annual growth of 3 per cent in the production of copper, iron ore and lithium over the next decade.
The world’s largest miners have been in a race to boost their exposure to metals and minerals needed for the energy transition, including copper and lithium.
Rio paid $6.7bn in cash to acquire lithium group Arcadium in October.
Meanwhile, BHP — which tried to buy Anglo American last year to boost its copper exposure — said on Thursday it had completed the acquisition of Filo Corp, a Canada-listed miner with copper projects in South America.
BHP, which paid $2bn for its share of Filo in a joint deal with Canada’s Lundin Mining, said it was “an exciting new copper growth opportunity”.
