Rio Tinto hits WA iron ore shipment record, faces pricing pressure from China with stockpiles and new index

Rio Tinto shipped a record volume of Pilbara iron ore during the December quarter but China is putting pressure on prices by building up stockpiles and forcing a new pricing index. The Anglo-Australian miner exported 91.3 million tonnes of iron ore for the final three months of 2025, a record quarterly result predicted by The West Australian. Rio clawed back 9mt of the 13mt of output it lost from cyclonic weather at the start of 2025 to ship 326.2mt for the year, meeting its guidance band of between 323mt and 338mt. But Rio is set to potentially lose out on billions of dollars each year after moving away from the London-based Platts pricing index to a new index overseen by China’s main iron ore buyer — China Mineral Resources Group. A large part of BHP’s well-publicised stand-off with CMRG revolves around the adoption of this Beijing-controlled index. For now, at least, Rio’s realised iron ore prices came within analyst expectations. Yet, prices could come under pressure soon, with China’s stockpiles of Rio’s ore rising about 15 per cent over the past three months. Rio suggested that Chinese demand appears to be soft. “(The) Chinese economy continues to be driven by production and exports, while investment and consumption moderated in (the December quarter) and the property market remains weak . . . near-term stimulus remains modest beyond infrastructure support,” it stated. On the copper side of Rio’s business, quarterly shipments rose 5 per cent year-on-year. Annual production rose 11 per cent, exceeding the top end of Rio’s increased guidance range. “Record copper production continues following delivery of our Oyu Tolgoi underground project, another demonstration of our unique and diverse project capabilities,” Rio chief executive Simon Trott said. Boosting copper exposure is the key driver of Rio’s ongoing pursuit of Glencore. Rio has until February 5 to make a formal offer under UK takeover rules. A sore point of the $300 billion merger discussions appears to be Glencore’s coal business, given Rio exited the commodity in 2018 amid environmental concerns. It has been speculated that a combined Rio-Glencore could spin off the coal division into a separate entity. Keeping coal will likely cause major headaches for Rio, according to Institute for Energy Economics and Financial Analysis analyst Simon Nicholas. “(Retaining Glencore’s coal business) may be a problem for some of Rio’s investors if their policies prevent them from investing in coal,” Mr Nicholas said. “This is particularly true of thermal coal — despite its acquisition of metallurgical coal mines from Canadian miner Teck in 2024, Glencore’s coal business is dominated by thermal coal. “Such investors are likely to want the coal business spun off either at the time of any merger, or as soon as possible afterwards.” But Mr Nicholas said spinning out coal was not the “responsible” path for Rio to take if it wants to maintain its position as an environmentally-conscious miner. “A spin-off of Glencore’s coal operations will do nothing to address global emissions – and it risks making them worse.”