Rio Tinto

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ISIN: AU000000RIO1

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Jo'

@Jo_Wolf

1Settimana·

🌍 Dry Bulk Market Update week 16 2025 : Drama - Navigating Tariffs, Weather, and Trade Shifts

Mid-April 2025 finds the dry bulk market caught in a stormy swirl of trade wars, weather woes, and shifting cargo flows. Capesize rates falter under tariff pressures, panamax struggles with muted demand, yet supramax and handysize find flickers of resilience. Sanctions, port fees, and production cuts reshape routes, while AI whispers promise for efficiency. This is a sector battling headwinds with grit—let’s chart its course.

⏬ Capesize Market: Weathering the Squall

Earnings Snapshot

Capesize bulkers, the iron ore titans, sail through choppy waters as rates skid to a six-week low. The Baltic Exchange’s index averages $15,148 per day, a 9% drop week-on-week, with a mid-week dip to $14,367 before a slight rebound. March highs of $24,000 per day feel distant, with West Australia-to-Qingdao (C5) rates plunging to $7.79 per tonne (down 25% weekly, though up 35% in a day) and Brazil-to-China (C3) at $18.74 per tonne after an 18% tumble. Weak Chinese iron ore imports (down 6% year-on-year in March) and tariff shocks drag sentiment, yet fundamentals hint at stabilization.

Demand and Supply Pressures

Extreme weather batters key exporters. Rio Tinto’s Pilbara shipments fall 9% to 70.7 million tonnes in Q1, hit by four cyclones costing 13 million tonnes—2025 guidance leans toward the low end of 323-338 million tonnes. Vale’s Brazilian output slips 4% to 67.7 million tonnes, though sales rise 4% to 66.1 million tonnes. China’s Q1 iron ore arrivals drop 9%, with port stocks down 6 million tonnes to 150 million. Yet, Fearnley Securities eyes April import normalization, and Brazil’s March exports climb 8%. Tariff fears curb Pacific activity—Rio Tinto fixes Dampier-to-Qingdao at $7.70 per tonne—while Atlantic routes like Tubarao-to-West Africa hit $18.15 per tonne.

Global Headwinds

U.S.-China tariffs (145% vs. 125%) and EU countermeasures jolt the market, with Braemar noting a “freefall” tied to Trump’s trade moves. A three-month tariff pause lifts forward freight agreements (FFAs) to $16,000 per day for April and $18,000 for Q2, signaling cautious optimism. However, Vale’s vague 325-335 million tonne guidance and Colombia’s coal cuts (Cerrejon down to 11-16 million tonnes) dim cargo hopes—capesize battles to hold its course.

Iron ore is loaded at the Ponta da Madeira terminal in Brazil - For illustrative purposes

⏳ Panamax Market: Adrift in Uncertainty

Rate Struggles

Panamax bulkers, versatile grain and coal carriers, drift in a softer market. Baltic Panamax Index rates hover around $11,500 per day, down 7% week-on-week, reflecting tariff-driven gloom and weaker coal flows. Secondhand prices for five-year-old vessels fall 12% from Q3 2024 peaks, per Veson Nautical, as global uncertainty stifles demand. Activity remains subdued, with limited fixtures reported—owners eye stabilization as bunker price swings complicate voyage trades.

Regional Dynamics

Colombia’s coal output cuts weigh heavily—Cerrejon’s reduction to 11-16 million tonnes (from 19 million in 2024) slashes capesize and panamax cargoes. Exports to Asia-Pacific (South Korea: 10 million tonnes, China: 6.65 million tonnes) rise, but long voyages (55-67 days) and high freight costs deter buyers. China’s coal imports from Colombia drop to 2 million tonnes in Q1 (from 3.9 million), favoring Australian coal’s $14 per tonne CFR price edge. Panamax shipments fall 24.6% to 11 million tonnes as capesize takes share—owners face a thinning cargo pool.

Trade Shifts

U.S. port fee fears for Chinese-built ships (70% of panamax orderbooks) push buyers toward Japanese tonnage, per Pacific Basin’s Martin Fruergaard. Scaled-back fees ($18 per net tonne, rising to $33 by 2028) ease concerns, but contractual haggling looms. Glencore’s Colombian cuts and EU decarbonization shift coal to Asia, stretching tonne-miles yet exposing fragility—panamax treads water, seeking firmer ground.

Coal being loaded onto a ship in the port of Jiujiang - For illustratives purposes

⏱️ Supramax Market: Flickers of Fortitude

Earnings Resilience

Supramax bulkers, nimble mid-sizers, show grit amid market malaise. Pacific Basin’s supramax fleet earns $12,210 per day, 55% above the Baltic Supramax Index, with Q1 operating margins up 61% to $820 daily. Secondhand prices dip 9% from Q3 2024, but fleet renewal (e.g., purchasing a 2018-built 38,000-dwt handysize) bolsters efficiency. FFAs for Q3-Q4 signal $9,000-plus daily—owners hold steady, banking on cargo coverage.

Activity and Coverage

Pacific Basin covers 95% of Q2 supramax days at $12,400, with 37% of H2 at $12,090—strong bookings shield against softening. China’s equipment exports (up 10.8%) and ASEAN trade (up 7.1% to CNY1.71 trillion) lift minor bulk demand. However, iron ore weakness and Colombia’s coal volatility (February exports down 21.1% year-on-year) cap gains. Supramax thrives on flexibility—steel trades optimize port times, dodging 2024’s congestion woes.

External Forces

U.S. sanctions on Iranian oil and Chinese refiners ripple indirectly, tightening tanker markets and nudging bunker costs. Tufton Assets sees bulkers benefiting from trade rerouting—tariffs spur new routes, favoring supramax’s versatility. AI adoption, led by South Korea, streamlines claims and fixtures—supramax sails with cautious optimism, leaning on operational savvy.

⏸️ Handysize Market: Steady Under Strain

Rate Rundown

Handysize bulkers, the fleet’s smallest stalwarts, navigate with poise. Pacific Basin’s handysize earnings hit $10,940 per day, 37% above the Baltic Handysize Index, with Q2 77% covered at $11,390 and H2 25% at $10,150. Secondhand prices fall 9% from Q3 2024, yet fleet upgrades (e.g., buying a 2020-built 40,000-dwt vessel, selling 21-year-old units) keep margins firm. Operating days rise to 6,950, up 300 year-on-year—efficiency drives returns.

Market Moods

China’s Q1 export growth (6.9% to CNY6.13 trillion) and ASEAN trade surge bolster cement and grain flows, but U.S. port fee threats (exempting vessels under 55,000 dwt) shift focus to Japanese-built ships (70% of Pacific Basin’s fleet). Colombia’s coal export swings (4.2 million tonnes in February, up 54.7% month-on-month) disrupt planning—handysize leans on diversified cargoes to weather volatility.

Influencing Factors

Tufton’s Q1 earnings dip to $8 million (from $11.76 million), with a -10.4% NAV return, reflecting rate softness. Yet, the fund eyes tariff-driven rerouting as a boon—handysize’s agility suits reconfigured trades. Rio Tinto’s bauxite boom (15 million tonnes, up 12%) lifts capesize and handysize tonne-miles—handysize holds firm, banking on niche strength.

🌐 What’s Moving It: Trade and Turmoil

Cargo and Supply

Iron ore falters—Rio Tinto’s $RIO (+1,21%)
$RIO (-1,8%)
$RIO (-1,66%) 9% shipment drop and Vale’s $VALE (-2,22%)
$VALE3 (-2,44%) 4% output decline shrink capesize cargoes, with China’s Q1 arrivals down 9%. Colombia’s coal cuts (10 million tonnes lost) hit capesize and panamax, though Brazil’s 8% March export rise and China’s equipment trade (up 10.8%) offer lift. Weather (Australian cyclones, Brazilian rains) and blockades (Colombia) disrupt flows—cargo volatility shapes the market’s pulse.

Global Forces

U.S.-China tariffs and U.S. port fees ($18-$33 per net tonne by 2028) spark uncertainty, though exemptions (small vessels, ballast arrivals) soften the blow. U.S. sanctions on Iranian oil and Chinese refiners tighten bunker markets, while Houthi strikes in Yemen add geopolitical heat. Bulkers benefit from rerouting—Tufton sees them outpacing containers—yet trade war fears cloud the horizon.

🌐 Market and Stocks: Value Amid Volatility

Stock Swings

Dry bulk stocks reel under tariff pressures. Tufton’s $SHIP Q1 profit falls to $8 million from $11.76 million, with a -10.4% NAV return as asset values slide. Pacific Basin’s $2343 (+0,77%) shares trade at a “big discount” to NAV, prompting a $40 million buyback. Secondhand prices drop—capesize down 11%, panamax 12%, supramax and handysize 9% from Q3 2024—yet Q1 rates defy the gloom, hinting at undervaluation.

Investor Perspectives

Analysts view the sell-off as overdone. Firms with lean balance sheets (25% debt-to-asset ratios) trade at trough levels despite firm rates and high newbuild costs. Pacific Basin’s fleet renewal and margin gains (up 61%) position it for resilience, while Tufton bets on rerouting to lift yields. Veson’s Park predicts a 2026 price rebound if trade stabilizes—investors weigh near-term pain against long-term promise.

Sector Outlook

U.S. tariff pauses and scaled-back port fees lift sentiment, but Chinese tariffs threaten consumer costs. Aging fleets (15% over 20 years) and low orderbooks (down 26% in Q1) signal future tightness—2026 looms as a turning point. Stocks lag fundamentals, ripe for a rebound if tariffs ease—bulkers stand poised, undervalued in the storm.

🌐 Outlook: Choppy Yet Hopeful

Fluid Futures

Capesize lingers at $15,000-$18,000 daily—tariffs bite, fundamentals nudge recovery. Panamax at $11,000-$12,000—coal cuts sting, stabilization looms. Supramax holds $12,000-$13,000—coverage shields—resilient. Handysize at $10,000-$11,000—agility endures—steady. AI and rerouting offer upside—2026 glimmers if trade steadies.

Your Call

Will capesize rebound or handysize hold the edge? Drop your take—let’s navigate the seas! 🚢

S.A.U.

@SAUgut77

4Settimana·

Rio Tinto negotiates development of large lithium deposit in Congo

Rio Tinto Group $RIO (-1,8%)
$RIO (+1,21%) has held talks with the Democratic Republic of Congo about the possible development of one of the world's largest hard rock lithium deposits. This was reported by Bloomberg today. It is the latest sign of the mining giant's interest in the battery metal.

Talks with Congolese authorities in recent weeks have centered on Rio Tinto's potential involvement in converting the Roche-Dure resource into a lithium mine.

However, these discussions are still at an early stage and may not lead to a formal agreement, the report said. Development of the Roche-Dure resource could significantly increase the global supply of lithium, a key ingredient in electric vehicle batteries.

This move by Rio Tinto demonstrates the growing interest in lithium as demand for electric vehicles continues to rise. The Roche Dure resource represents a significant opportunity for the mining company to expand its battery metals activities.

S.A.U.

@SAUgut77

1Mes·

Rio Tinto defies investor pressure: no review of dual listing

The mining group Rio Tinto $RIO (-1,8%)
$RIO (+1,21%) is facing calls to reconsider its current dual listing on the London Stock Exchange and the Australian Securities Exchange. This structure is seen by some investors, led by London-based hedge fund Palliser Capital, as a hindrance to shareholder value and capital raising. Palliser Capital is calling for a unification of the listing, preferably in Australia, to increase efficiency.

Palliser Capital is supported by the influential proxy advisors Glass Lewis and Institutional Shareholder Services (ISS), who argue that the dual listing could slow down the share in the long term. Despite these claims, Rio Tinto's management is sticking to its strategy. The Board of Directors has unanimously voted against a review of the listing structure and emphasized that external advisors have assessed the current structure as beneficial to the company and its shareholders.

Rio Tinto argues that the dual listing allows it to take advantage of both markets and reach a wide range of investors. A change would incur immense costs and take the focus away from the long-term growth strategy. However, this stance has had an immediate impact on the share price: in London, Rio Tinto shares temporarily fell by 0.23 percent to 48.96 pounds.

Palliser Capital is disappointed by the decision and has announced that it will continue to exert pressure on the management. A spokesman for the hedge fund criticized Rio Tinto's management for ignoring clear signals from the market. The debate illustrates the growing tensions between shareholders and management, with investors calling for a new direction while Rio Tinto is focusing on stability.

In the long term, it remains uncertain whether Rio Tinto's strategy will be successful or whether it will have to bow to market pressure. The discussion about the future of the company will continue and could escalate again at the next Annual General Meeting. What is certain is that the management's decision will further fuel the debate about the company's value and Rio Tinto's future strategy.

2 Commenti

Markus@_xempex_

1Mes

I can't say much about the pros and cons at the moment. But I find this section the most remarkable "However, this stance has an immediate impact on the share price: In London, Rio Tinto shares temporarily fell by 0.23 percent to 48.96 pounds."

Why not just "plummeted by 0.23 percent!". 🤣 This is how the media can spread opinions.

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Mostra la risposta

S.A.U.

@SAUgut77

1Mes·

Rio Tinto defends dual listing - No change planned

The board of Rio Tinto $RIO (-1,8%)
$RIO (+1,21%) has unanimously recommended that shareholders vote against a resolution proposed by an activist investor calling for an independent review of the company's dual listing.

Palliser Capital, a London-based hedge fund, has called on the Anglo-Australian mining giant to consolidate its corporate structure into a single Australian company, arguing the current dual listing in London and Sydney diminishes value for shareholders.

Ahead of the AGMs scheduled for April 3, 2025 and May 1, 2025, Rio Tinto has issued a statement to all shareholders responding to the resolution tabled by Palliser Capital and other shareholders, as well as the related reports from Glass Lewis and ISS.

Leading international proxy advisory firm Glass Lewis and ISS recommended that Rio Tinto shareholders vote in favor of Palliser's proposal in order to conduct a proper review of the unification of Rio Tinto's dual listed company structure.

In the meantime, Rio Tinto explained that the rationale for unifying the structures of dual listed companies at other companies, such as BHP, is not applicable to its own situation. This is due to several factors, including the location, growth prospects and tax profile of the group's assets, as well as the size of the entity that would need to be absorbed in a potential dual-listed company unification.

In the Notice of Annual General Meeting 2025, Palliser Capital has proposed a resolution calling on Rio Tinto plc to establish a committee of independent directors, including an external shareholder representative. This committee will consider whether the combination of the two listed companies into one Australian-based holding company is in the best interests of shareholders. The resolution also calls for the committee to commission an independent report on this issue and publish a comprehensive report on its findings.

Rio Tinto has rejected Palliser Capital's claims of an alleged $50 billion loss in value due to the structure of the dual listed companies as unfounded and misleading. The company further argued that the combination of the two listed companies would be value destroying for the Group and its shareholders.

S.A.U.

@SAUgut77

1Mes·

Rio Tinto joins Mitsubishi as investor in US recycling project

Rio Tinto $RIO (-1,8%)
$RIO (+1,21%) invests in Exurban, a UK-based recycling company with plans to build a facility in the US to recover metals from cell phones, computers and other electronic waste (e-waste).

According to an investor newsletter seen by Bloomberg, Rio, along with recycling and circular economy company Giampaolo Group, will take a minority stake of 10-15%. They join other well-known investors such as Mitsubishi Materials and MKS PAMP.

Exurban was founded in 2022 by a group of well-known figures from the metals industry, including the former head of marketing for copper and cobalt at Glencore.

"We share a vision to supply the industry of the future with essential metals by using a new, waste-free recycling technology. I look forward to working together to make this vision a reality," said Stefan Boel, CEO of Exurban, in a statement.

The partnerships will help set new standards in e-waste recycling and related advanced technology projects, said Exurban, which plans to build a $340 million facility in Fort Wayne, Indiana, to recover metals such as copper, gold and silver.

The company had previously aimed to start construction in 2023, but this is now unlikely to happen before 2026, according to the newsletter. In the short term, Exurban plans to complete a feasibility study by the middle of this year.

2 Commenti

Nobody@Nobody_123

1Mes

That's pretty cool 👍👏 Rio is really investing in all directions

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S.A.U.

@SAUgut77

1Mes·

Rio Tinto: Solar and battery deal sealed with Edify Energy

The management of Rio Tinto Ltd $RIO (-1,8%)
$RIO (+1,21%) announced yesterday that it has signed two new solar and battery power contracts with Edify Energy. These will power the company's aluminum production facility in Gladstone, Queensland.

Under the terms of the agreement, Rio will purchase 90% of the electricity generated by Edify's Smoky Creek and Guthries' Gap solar power plants, as well as battery storage capacity, over a 20-year period. Edify will build, own and operate the plants itself. Construction is scheduled to start at the end of 2025, with completion scheduled for 2028.

The move is part of Rio's efforts to further decarbonize its aluminum production - particularly in light of an Australian government incentive program launched earlier this year to support the production of low-carbon aluminum.

Back in January, Rio entered into a partnership with aluminum producer Norsk Hydro to develop new carbon capture technologies for the industry.

6 Commenti

Invest_wise@Invest_wise

1Mes

Do you work at RioTinto or where do you constantly get this information from?

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S.A.U.

@SAUgut77

1Mes·

Rio Tinto wants to sell bonds to finance the purchase of Arcadium Lithium

The Rio Tinto Group $RIO (-1,8%)
$RIO (+1,21%) wants to sell bonds in the USA to raise a bridge loan to finance the 6.7 billion dollar takeover of Arcadium Lithium.

The world's second-largest mining company did not specify how much it plans to raise in its filings with the US Securities and Exchange Commission. A Rio spokesman declined to comment.

Rio recently abandoned plans to raise as much as $5 billion through a share sale after investors objected, according to people familiar with the matter.

The mining company completed its acquisition of Arcadium last week and said it was financing the acquisition by drawing down an existing $7 billion bridge loan, which it plans to replace with long-term debt financing. Goldman Sachs Group Inc. and JPMorgan Chase & Co. advised Rio on the acquisition.

"Market talk indicates that a benchmark-sized transaction with maturities of 2, 3, 5, 7, 10, 30 and 40 years is expected," CreditSights analysts, including Wen Li, said in a note published on Tuesday.

S.A.U.

@SAUgut77

1Mes·

Rio Tinto updates invitations for Annual General Meetings 2025

Mining giant Rio Tinto has today issued updated notices for its 2025 Annual General Meetings (AGMs) for both Rio Tinto plc $RIO (-1,8%) and for Rio Tinto Limited $RIO (+1,21%) have been published. The revised notices include a resolution requested by certain shareholders which will now be voted on jointly by shareholders of both businesses.

The resolution in question, identified as Resolution 21, has been added to the Rio Tinto Limited Notice to make it the same as the corresponding item in the Rio Tinto plc Notice. This makes it a joint resolution matter. This adjustment demonstrates how the Company is responding to shareholder demands and adopting a consistent approach to the voting process across both businesses.

All other agenda items for the meetings remain unchanged from the previous invitations dated 19.02.2025. The AGMs are scheduled for 03.04.2025 in London (Rio Tinto plc) and 01.05.2025 in Perth (Rio Tinto Limited). Shareholders can choose to attend the meetings in person or join virtually.

The updated invitations and proxy forms are now available on the company's website and have been submitted to the Australian Securities Exchange (ASX). In addition, the invitation for Rio Tinto plc will be lodged with the UK National Storage Mechanism.

This announcement underlines Rio Tinto's commitment to transparency and active shareholder engagement. It also emphasizes the importance of shareholder involvement in company decisions.

The update is part of regular corporate communications and is based on a Rio Tinto press release. This will ensure that all shareholders are aware of the latest developments regarding the forthcoming AGMs.

S.A.U.

@SAUgut77

2Mes·

Palliser Capital responds to Rio Tinto's disenfranchisement of the company's Australian shareholders in the unification debate

Palliser Capital has published a letter to the Board of Rio Tinto $RIO (-1,8%)
$RIO (+1,21%) seeking an independent, comprehensive and transparent review of the Board's anomalous decision to retain the dual listed company ("DLC") structure.

The letter questions the Board's mindless decision to reject the shareholder resolution co-promoted by Palliser calling for such a review, despite the process called for being entirely in line with best practice for a matter of such critical importance.

Worse still, Palliser notes that the Board has gone so far as to deliberately omit the resolution from Rio Tinto Limited's Annual General Meeting:

"23% of Rio Tinto shareholders were prevented from voting on the simple question of whether Rio Tinto's decision to retain its archaic structure requires a full and proper review"

Palliser calls on the Board to bring the resolution it has co-sponsored to Rio Tinto Limited's Annual General Meeting without delay and to apply the principles of transparency, accountability and fairness to the unification debate.