Challenging and volatile market conditions are expected to continue, said the head of Rio Tinto, despite last month’s price rises.
The company revealed earning of $1.6bn for the first six months of 2016, almost half its earnings for the same period last year.
It is a very challenging and volatile market, said Rio Tinto’s CEO Jean-Sébastien Jacques, as he released the metals and mining company’s half-year report. “Market conditions are expected to remain challenging and volatile in the future. There is no room for complacency,” he added.
The global economy had been ‘more resilient than markets had anticipated’ in 2016, said the report, but warned the recovery was unbalanced.
“Growth in China has stabilised… [but] the global economy seems stuck in a subdued low-productivity growth pattern which would indicate that continued caution is required for the second half of 2016,” Jacques told the Wall Street Journal.
The price of iron ore rose from $40 a tonne in January to $60 in April, Rio Tinto’s report said, spurred by a ‘credit-fuelled bounce’ in the Chinese construction market. China imported 520m tonnes in the first six months of this year.
The price of metallurgical coal, used in forges, also rose. However other metals, like aluminium and copper, were less affected by China’s construction boom, it reported.
July price rise
In its latest monthly report on commodity prices, Mintec reported a month-on-month increase in nickel (+13%), zinc (+9%), lead (+7%), copper (+6%) and tin (+3%) between June and July this year. Aluminium fell 1% and cold roll steel also continued to fall, the report said.
Mintec also found a month-on-month price rise in cotton (+19%), rubber (+10%), wool (+7%) and polyester yarn (+5%).
In the consumable, Mintec said cherry tomatoes, grapes and rice all saw price increases, while the price of watermelons, peppers and peaches fell. Beef, lamb and pork on balance have also seen global price rises.
The average price of butter in the EU rose by 12% in July, with the largest increase in Poland (+17%), the UK (+16%) and France (+12%) due to high global demand.
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