Rio Tinto(RIO.US)delivered slightly lower-than-expected iron ore shipments in Q3, reiterating its full-year production target

Zhitong Finance learned that Rio Tinto (RIO.US) reported a 1% YoY increase in its iron ore shipments in Q3, slightly below market expectations, as the improvement of its Pilbara business raised production. Iron ore prices still faced pressure and demand outlook was dim during most of Q3. The world's largest iron ore producer shipped 84.5mn tons of iron ore from its Pilbara business in the three months ended September 30, up from 83.9mn tons a year ago; compared with the consensus estimate of 84.74mn tons.

Rio Tinto reiterated its full-year iron ore production guidance after raising production in September. The company said it still expects to achieve its full-year target of shipping 323mn to 338mn tons of iron ore from its Pilbara business in the year ending December 31.

Rio Tinto's alumina production rose 8% YoY to 15.1mn tons, while titanium dioxide slag production rose 7% YoY to 263mn tons. However, aluminum production (-2%) and copper production (-1%) both declined, as did Rio Tinto's IOC's iron ore pellets and concentrates (-11%).

The only change to Rio Tinto's guidance was a reduction in its IOC production target to 91mn to 96mn tons from 98mn to 1150mn tons after the entire plant was shut down for 11 days in July due to forest fires.

Rio Tinto CEO Jakob Stausholm said the company's Simandou iron ore project will come online next year, while the Roncon lithium plant will start its first lithium shipments by the end of this year. Meanwhile, Rio Tinto's Oyu Tolgoi underground mine's copper production is still increasing.

Rio Tinto recently agreed to buy Arcadium Lithium (ALTM.US) for US$6.7bn, which will make it the world's third-largest battery metal miner. Stausholm also noted Rio Tinto's recent acquisition of Arcadium Lithium, saying it increased the company's exposure in a "high-growth, attractive market."

Shipments improved in Q2 due to low port inventories and train derailments. Pilbara iron ore production was 84.1mn tons in the three months ended September, up from 83.5mn tons a year ago.

The company said its unit cash cost for Pilbara iron ore this year would be in the upper half of its expected range of US$21.75 to US$23.50 per ton, reflecting higher inflation expectations.