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UPDATE 1-Rio Tinto sees tight coking coal, copper markets
March 1, 2012 / 5:16 AM / 6 years ago

UPDATE 1-Rio Tinto sees tight coking coal, copper markets

* Emerging markets demand growth underpins coking coal

* Rising costs, disruptions keep copper tightly balanced (Adds details)

MELBOURNE, March 1 (Reuters) - Rio Tinto, the world’s third-largest miner, said it sees coking coal and copper markets remaining tight, while margins were being squeezed in aluminium.

“Demand for commodities in 2012 will be supported by a through-the-year improvement in global growth, although we cannot rule out periods of volatility similar to those in 2011,” Rio Tinto’s chief economist, Vivek Tulpule, said in slides prepared for a presentation in Sydney.

He maintained Rio Tinto’s outlook that economic growth in China would remain above 8 percent in 2012.

As a result, the market for coal used in steel making “remains tightly balanced”, the slides said, with countries outside China helping to pump up demand in 2012 and 2013.

The “copper market remins tight despite supply growth”, the slide presentation said, with the company anticipating rising costs and supply disruptions to continue, following strikes last year.

Rio Tinto, which is looking to sell most of its Australia and New Zealand aluminium business, remains bearish on the aluminium market, with smelters facing a margin squeeze as costs rise and aluminium prices remain weak.

“But the global bauxite market is growing rapidly” with Chinese imports of bauxite from Indonesia taking off.

Rio Tinto earlier this week reiterated it expects the global iron ore market to remain in deficit even after massive expansions by top iron ore miner Vale, Rio Tinto and BHP Billiton, as smaller miners’ projects were running into delays.

Reporting by Sonali Paul; Editing by Sugita Katyal

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