Shares in Rio Tinto PLC (LSE:RIO) eased slightly after a mixed update from its second quarter that highlighted strong iron ore production but issues elsewhere, especially in copper.
Iron ore output will be at the higher end of this year’s guidance of between 320-335 million tonnes (Mt), though forecasts for refined copper were cut to 160,000-190,000t even with the start of the Oyu Tolgoi being ahead of plan.
Sales have also been affected by the crisis in the Chinese property markets, and Rio said: “China's economic recovery has fallen short of initial market expectations, as the property market downturn continues to weigh on the economy.”
Iron ore shipments dipped slightly to 79.1Mt while Rio noted iron ore prices declined by 12% over the quarter as China's steel demand recovery encountered ”persistent headwinds”.
The copper LME price fell 8% over the quarter, while the average price was down 5% quarter on quarter to US$3.84/lb. The guidance for cost in 2023 also went up to 180-280 cents/lb from 160-180 cents.
"Copper production downgrades during the quarter highlight that we still have much more to do," chief executive Jakob Stausholm said.
Rio also downgraded its expectations for alumina production and output at its Canadian iron ore operations.
At 9.45am, shares were down 20p to 5,090p.