LONDON Feb 14 Rio Tinto expects iron
ore prices to retreat only slightly this year from current high
levels as fewer projects than expected come on stream, the chief
executive of the world's no.3 miner said on Thursday.
Benchmark 62-percent grade iron ore hit
15-month highs last month of almost $160 per tonne, almost
double from a trough it hit last September. They are down only
2 percent from that high.
"I expect that prices will come off a bit but still be
robust," Rio Tinto's new chief executive, Sam Walsh, told
journalists at a news conference after the company reported its
"I think it would be very bullish to expect that the prices
will remain where they are through the full year," added Walsh,
the group's former iron ore boss.
A plunge in iron ore prices to three-year lows below $87 in
September marked a turning point for the raw material, which is
a big money-spinner for producers such as Rio, Vale
and BHP Billiton .
The low was followed by an aggressive restocking drive by
Chinese steel mills, which lifted the price to its highest since
October 2011. Supplies are still tight, which should keep prices
high in the first half.
While a range of projects is due to come on stream this
year, some are likely to be constrained by logistical, labour
and financial difficulties, Walsh said.
"Not as many projects will come on as people have
predicted," he said. "These projects are hard and they are
sizeable investments, and some people are finding it harder to
arrange loan funding."