- Rio Tinto (RIO -0.9%) iron ore boss Andrew Harding says a short-term oversupply of housing in China will keep a lid on demand for steel for several years, in comments that are bearish for iron ore prices in the short term.
- "In 2015 to date, China's steel production has been much the same as last year. There is inventory in the housing sector that has to be run down, and that will lead to a few years of reduced consumption of new steel," Harding says.
- The results have given credence to claims by China's Iron and Steel Association that Chinese steel production has peaked at the 823M metric tons produced in 2014, and will not reach 1B per year, as predicted by Rio and BHP Billiton (BHP -0.8%).
- But Harding says Rio will not be deterred by the short-term outlook, and is focused on the more encouraging long-term demand outlook for steel and iron ore.