Rio Tinto Group forecasts its iron ore shipments will remain flat this year or rise by 3 percent at most, reinforcing market sentiment that a wave of new supply is turning into a trickle.
The world’s second-largest exporter expects shipments from Western Australia of between 330 million metric tons and 340 million tons in 2018, the company said Tuesday, confirming guidance published last month. That compares with 330.1 million metric tons recorded last year.
Top exporters “clearly haven’t pushed the envelope too hard” and are showing restraint over additions to supply, Daniel Hynes, a Sydney-based analyst at Australia & New Zealand Banking Group Ltd., said Tuesday in a Bloomberg Television interview.
Even as they build cash piles amid higher metals prices, the biggest mining companies are reluctant to commission new operations that’ll deliver any major expansions, he said.
“There’s certainly a different feel about this cycle,” Hynes said. “We’re going to see a lower level of growth in supply in this cycle than in some of the previous ones.”
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