Rio Tinto has warned of a persistent slowdown in global commodity markets as the threat of recession in Europe and the US along with a property crisis in China weigh on iron ore demand. The Anglo-Australian mining company said in its third-quarter update on Tuesday that commodity prices were expected to keep falling as “downside risks to demand” emerge. The price of iron ore contracts in Singapore has fallen more than 46 per cent from its most recent peak in March.
Although Beijing has increased policy support to restore confidence in its economy, the recovery has been uneven, Rio Tinto said, highlighting that the Chinese construction sector, the biggest market for Australian iron ore producers, remains weak.
“Slowing global demand poses downside risks to China’s strong exports, while consumers remain cautious of the property market,” the company said.