Rio Tinto has delivered perhaps its most pessimistic outlook yet for the iron ore market, saying record steel exports from China and declining scrap use in the steelmaking process were "far from sufficient to absorb the growth in low-cost seaborne supplies" last year.
As a result, iron ore prices fell to below $40/mt CFR towards the end of 2015, which was 80% below the market peak in 2011, Rio pointed out.
The Anglo-Australian company was reporting its financial performance for 2015, which saw its underlying earnings from iron ore plunge 51% on the year before to $3.9 billion.
Speaking from London Thursday, CEO Sam Walsh describe the market environment as challenging, but said long-term demand for commodities such as iron ore remained sound.
Source: Platts