MELBOURNE, Jan 16 (Reuters) - Rio Tinto on Tuesday said that it expects stimulus measures in China to drive a slow recovery in the world's biggest steel user as it reported its second highest-ever iron ore shipments in 2023.
China's stimulus measures have already lent support to commodity prices, Rio Tinto said, and it also expects to see an economic recovery in the euro zone gather steam later this year given that interest rates have likely peaked.
"Stimulus measures are expected to drive a gradual recovery in 2024, albeit weighted towards the second half, with (China's) real estate sector remaining weak," it said.
Rio Tinto reported a 3% rise in full-year shipments to a five-year high as it leans on greater efficiencies and higher production from its Gudai-Darri mine in Western Australia.
The company shipped out 331.8 million metric tons of the steel-making ingredient last year, meeting its guidance for between 320 million and 335 million metric tons for the calendar year. That was in line with analyst expectations of 332 million tonnes.
The world's largest iron ore miner has been producing more of its SP10 product while it prepares to bring on five new mines that will help boost its production to records of 345 million to 360 million metric tons in the medium term. The SP10 product is lower-quality iron ore than its flagship Pilbara blend.
Rio Tinto's report comes as prices of iron ore, which accounts for around 90% of its underlying earnings, rose 17% over the quarter to average at $129 per dry metric tonne (dmt) as China demand revived. It received an average of $109.2 per dmt for the half.
It reaffirmed its fiscal 2024 iron ore shipments forecast between 323 million metric tons (Mt) and 338 Mt.
For the fourth quarter ended Dec. 31, 2023, the miner shipped 86.3 Mt of iron ore from its Pilbara operations, down 1% from a year ago. SP10 accounted for 20% of shipments.
Rio Tinto will report its full-year earnings on Feb 21. (Reporting by Melanie Burton in Melbourne, Rishav Chatterjee and Poonam Behura in Bengaluru; Editing by Lisa Shumaker and Jonathan Oatis)