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BHP, Rio face drop in iron ore sales

October 10, 2008

BHP Billiton and Rio Tinto face a 10% drop in iron ore sales this year because Chinese steel mills are cutting output, ANZ Bank says.

China's demand for iron ore may decline 52 million tonnes this year, Mark Pervan, head of commodity research at the bank, said in a note.

About 36% of that ore would come from Australia, reducing BHP and Rio's sales about 10%, he said.

Steel mills in China, the world's biggest producers, are asking mining companies to postpone deliveries of the raw material because of slower sales, Mount Gibson Iron said yesterday.

BHP is the world's biggest mining company and Rio is the No. 3.

Four leading Chinese mills, including Shougang and Hebei Iron & Steel, are reducing production by as much as 20%, or 20 million tonnes, until the end of the year.

Bloomberg

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