Rio Tinto has warned that labour shortages, muted Chinese demand, falling commodity prices and the threat of recession are raising “considerable” headwinds, despite reporting a significant increase in iron ore production from its Australian mines in the June quarter.
The Anglo-Australian miner said demand from its biggest market China had “troughed” in May because of Covid-19 lockdowns. While demand recovered in June, the company said that “uncertainties remain given the potential for ongoing outbreaks”.
The market update released on Friday came as China narrowly missed a second-quarter contraction in the three months to June after Covid outbreaks prompted harsh lockdowns in economically significant areas including Shanghai and Beijing. The result was well below economist expectations of 1.2 per cent growth.