Rio Tinto predicts modest growth in global steel and iron ore demand through 2030

Rio Tinto announced that it expects a slight rebound in global demand for iron ore and steel over the next fifteen years. The miner predicts that global demand for iron ore will grow by 2 percent, bringing the annual growth rate (CAGR) to 3 billion tons by 2030. In addition, global steel demand is set to grow 2.5 percent per year until 2030.

According to Rio Tinto, Chinese steel production will show modest growth over the next fifteen years, while demand will grow rapidly in other emerging markets, including Southeast Asia and India. China's annual steel production is projected to reach 1 billion tonnes by 2030, despite concerns about a slowdown in economic growth. This is much higher compared to the current production of just over 800 million tonnes. Rio Tinto expects a significant jump in Chinese exports of higher value-added finished steel products amid increased construction and infrastructure development in other parts of the world. Global steel demand in the region excluding China is expected to grow 65 percent by 2030.

Meanwhile, commodity prices hit the bottom at $ 44 per tonne in July this year, but have since climbed to $ 55.80 per tonne. Rio Tinto noted that it successfully reduced the cash costs of mining iron ore to $ 20.40 per tonne during 2014 and to $ 16.20 per tonne in the first half of 2015 through drastic measures to reduce costs and improve mine productivity. The company maintained its production target of 335 million tonnes of iron ore for the next year and 350 million tonnes for 2017.

Meanwhile, BHP Billiton cut its forecast for Chinese steel demand from an early 1-1.1 billion tonnes in the mid-2020s to 935-985 million tonnes. However, the miner did not express his opinion on the price of iron ore for the next fifteen years.