(Reuters) -Rio Tinto logged its smallest first-half underlying profit in five years on Wednesday, pressured by weak iron ore prices amid oversupply concerns and slowing China demand, and flagged rising costs at its Pilbara operations.
Iron ore prices eased in the first half of the year as steel production in top consumer China declined and more supply from Australia, Brazil, and South Africa came to the global market, denting Rio Tinto’s earnings from the steel-making raw material.
Expectations that China will curb overcapacity in the steel sector and likely restocking before 2025-end could underpin a pickup in prices to $100 per metric ton towards the year-end, according to a note by Morgan Stanley.
Rio Tinto, the world’s largest iron ore producer, reported underlying earnings of $4.81 billion for the six months ended June 30, down 16% from a year earlier and missing a Visible Alpha consensus of $5.05 billion. This was the company’s weakest first-half performance since 2020.
The miner, which is increasingly shifting its focus to copper, declared an interim dividend of $1.48 per share for the first half of the year, lower than the $1.77 apiece it gave out last year.
For the six months ended June 30, Rio Tinto’s unit costs at its flagship Pilbara iron ore operations in Western Australia rose to $24.3 per wet metric ton (wmt) from $23.2 per wmt last year, due to lower shipments and impact from cyclones.
For the full-year 2025, Rio Tinto had earlier forecast a range of $23 and $24.5 per wmt.
It maintained its full-year Pilbara shipment guidance at the lower end of its 323 million tons (Mt) and 338 Mt forecast range.
(Reporting by Sameer Manekar and Rishav Chatterjee in Bengaluru, Melanie Burton in Melbourne; Editing by Subhranshu Sahu)
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