Mining giant Rio Tinto said its third-quarter iron ore production declined to 80.9 million tonnes, down 5% on the previous year, due to maintenance on rail and the Cape Lambert ship loader.
The miner lowered its 2016 guidance and expects to ship between 325 million tonnes and 330 million tonnes in 2016, down from its earlier guidance of 330 million to 340 million tonnes.
However, production guidance for 2017 remains unchanged at 330 million to 340 million tonnes.
Production of thermal coal fell to 4.3 million tonnes in the quarter, down 6% compared with a year ago, while hard coking coal production jumped 17% to 2.2 million tonnes.
Bauxite production for the quarter also improved by 10% from a year ago to 12.4 million tonnes and aluminium rose by 11% to 924,000 tonnes.
Meanwhile, Fortescue, which ranks behind Rio Tinto and BHP Billiton as the third-largest Australian iron ore producer, announced an increase in both the shipping and production of iron ore during the quarter ending September 2016.
Fortescue boosted iron ore shipments by 5% versus a year earlier and 1% quarter on quarter to 43.8 million tonnes in its first quarter ended September this year.
“Iron ore and steel markets continued to be supported by infrastructure and housing activity in China during the September 2016 quarter,” Fortescue said in a statement.
“Steel consumption in China remains stable and together with exports resulted in annualised steel production of 809 million tonnes at the end of September,” it added.
According to JP Morgan, iron ore is the chief driver of capesize rates so far this year, although coal has reversed its drag on demand, and soyabeans and bauxite also showed good tonne-mile trends.
Chinese steel mills seemed to be chasing top quality iron ore to help increase output and meet Beijing’s tougher environmental standards, driving the premium for high-grade ore to its highest in two years.
Iron ore rose to above the $58 per tonne mark this week, but that is still low when compared to the peaks enjoyed during the past few years.
However, analysts at Macquarie Research attributed the continued price strength witnessed this year to disappointing shipments.
“Weekly port data we track shows that since the start of September to the week ending 16 October combined shipments have been running down ~1 per cent year on year,” Macquarie research said in a report.
Rio Tinto and Fortescue released their production results a day after the rival BHP Billiton forecast signs of recovery in the commodities market and maintained its full year guidance for the year.
This article first appeared on Rail Express affiliate site Lloyd’s List.