Rio Tinto's Rally Shows Mettle On Robust Outlook for Iron Ore
By STEPHEN BELL
October 31, 2006; Page C3
PERTH, Australia -- Shares of Anglo-Australian mining group Rio Tinto have soared 13% in London so far this month amid renewed optimism about iron-ore prices.
Many analysts say the rally could continue if looming price negotiations with steelmakers benefit the company.
A few months ago, most pundits expected contract prices for iron ore to slide between 5% and 10% from next April, giving some relief to steel producers who have suffered three consecutive years of big price increases. But continuing strong demand from China, along with delays in production increases by the Big Three iron-ore exporters -- Cia. Vale do Rio Doce, or CVRD, of Brazil, Rio Tinto and BHP Billiton -- have caused analysts to turn bullish again.
Morgan Stanley expects a 15% rise in contract prices from April 1, or roughly double market expectations. "We're out there at the top at the moment," says Craig Campbell, an analyst at Morgan Stanley, who rates Rio Tinto's shares a "buy," with a 12-month price target of A$95, or US$73, a share.
In London trading yesterday, Rio Tinto shares fell 1.4% to ￡28.58 ($54.21) amid weakness in the mining sector, leaving them with a 13% gain so far this month. The shares are dual-listed in Sydney, where they rose 3.1% yesterday to close at A$79.77, putting it up 14% for October.
"Rio is our preferred stock at the minute, in preference to BHP, and iron ore is clearly one of those drivers," he says. He adds that a clearly bullish sign is that iron-ore freight rates stayed elevated at a time when oil prices have softened.
Contract iron-ore prices are negotiated annually between major steelmakers and the Big Three miners, which together account for roughly 70% of the traded export market. The latest round, which resulted in a 19% price rise for the Japanese fiscal year ending March 31, dragged on much longer than expected because of China's unwillingness to agree to another increase. The 19% increase was initially agreed to in May by European and Japanese mills, but China held out for an additional month before reluctantly falling into line.
Preliminary negotiations between the Australian miners -- Rio Tinto and BHP -- and Japanese mills started this month in Sydney. But more intense talks involving China, which is led by Baosteel Group, aren't due to begin until late November.
A Rio Tinto spokeswoman declined to comment on the coming talks. But Sam Walsh, chief executive of Rio Tinto's iron-ore group, already has set the ball rolling.
"The market is tight, but if we look forward I think the prospects are good for the steel industry, they're good for the iron-ore industry and from that viewpoint I would expect iron-ore prices would increase next year," he told Australian Broadcasting Corp. radio Oct. 16.
As the world's second-biggest producer of iron ore behind CVRD, Rio Tinto will profit strongly next year if prices rise again. Analysts predict that Rio Tinto will post a net profit of about US$8 billion in calendar 2006, up from US$5.2 billion the previous year.
J.P. Morgan has an "overweight" call on Rio Tinto, and on Oct. 18 raised its share-price target to A$105 from A$96. "Stronger near-term and, more importantly, longer-term iron-ore price forecasts have been the major force behind the upgrade," the brokerage firm said. J.P. Morgan predicts a 7.5% price rise for the commodity next year, but doesn't rule out a gain of more than 10%.
UBS analyst Glyn Lawcock says the iron-ore negotiations will be one of the biggest influences on Rio Tinto's share price in the near term. UBS has a "buy" rating on Rio Tinto, with a 12-month price target of A$95.
Merrill Lynch also has a "buy" rating on Rio Tinto, with a price target of A$95. On Oct. 10, Merrill said it lifted its 2007 iron-ore price forecast to a 5% increase, compared with a rollover
铁矿石市场前景助推Rio Tinto
2006年10月31日17:09大 | 中 | 小
由于铁矿石价格前景再度看好，澳大利亚矿业公司Rio Tinto在伦敦市场的股价本月迄今涨幅已达13%。
许多分析师说，如果该公司在即将与钢铁生产商进行的价格谈判中占到上风，则其股价的上升势头还将继续。
相关报导
? 中国无力阻止铁矿石价格上涨
? Rio Tinto与韩国浦项制铁就铁矿石涨价19%达成协议
? 矿石涨价两成几为定局
中国钢铁厂家面临重压
? 中国政府在铁矿石价格问题上转变姿态
? 中国钢铁生产商主导铁矿石价格谈判
几个月前，多数行家预计，从明年4月份起的下一合同年度铁矿石合同价格将下滑5%-10%， 这一预期曾让已连续三年遭受矿石大幅涨价之苦的钢铁生产商多少松了口气。
但来自中国的强劲需求以及三大矿石出口商增产计划迟迟不能落实的事实让分析师改变了看法。三大出口商包括巴西的淡水河谷公司(Cia. Vale do Rio Doce)及澳大利亚的Rio Tinto和必和必拓(BHP Billiton)。
摩根士丹利(Morgan Stanley)预计，从明年4月1日起，矿石合同价格将上涨15%，这个幅度是市场平均预期的大约两倍。摩根士丹利分析师克莱格?坎贝尔(Craig Campbell)说，目前我们的预期是最高的。他对Rio Tinto的股票评级是买进，对该股的12个月目标股价预期是95澳元（合73美元）。
Rio Tinto在伦敦和悉尼两地上市。伦敦股市昨天矿业类股整体下挫，Rio Tinto股价跌1.4%至28.58英镑(54.21美元)，不过，该价位较本月初仍有13%的涨幅。在悉尼股市，Rio Tinto涨3.1%至79.77澳元，全月累计涨幅为14%。
坎贝尔说，Rio是他们眼下最看好的股票，甚至超过了必和必拓，而且矿石价格显然是推动Rio股价的动力之一。他还说，一个很明显的利好迹象是，在油价回落之时，矿石的运价却仍居高不下。
每年，上述三大铁矿石出口商都会与钢铁生产商就矿石合同价格进行谈判。这三家出口商的贸易量合计约占全球铁矿石出口市场总交易量的70%。以上一合同年度（与日本财政年度同步，截至今年3月31日）为例，当年合同价格较上年上涨了19%。该年度的谈判因中国不愿接受再度涨价而延后。涨价19%的方案起初在5月份时获得了欧洲和日本钢铁商的同意，但中国不肯就范，谈判因此往后拖延了一个月。
本年度的初步谈判本月已由Rio Tinto和必和必拓与日本钢铁商在悉尼拉开序幕。但有中国厂商参加的后续谈判要到十一月底之后才会开始。中国谈判方将由宝钢集团(Baosteel Group)牵头。相信在后续谈判中争论会比较激烈。
Rio Tinto发言人拒绝就即将进行的价格谈判发表评论。不过该公司矿石集团首席执行长山姆?威尔士(Sam Walsh)此前已有所表示。
威尔士10月16日对澳大利亚广播公司(Australian Broadcasting Corp.)表示，矿石市场的确非常吃紧，但如果说到今后，我认为钢铁行业的前景很好，因此对矿石行业也很有利，从这个角度来说，我认为矿石价格明年还将上涨。
Rio Tinto是仅次于淡水河谷的全球第二大生产商。如果明年矿石价格再度上升，Rio Tinto的盈利将受到极大提振。分析师预计Rio Tinto 2006年日历年度的净利润将达80亿美元，较上年的52亿美元有所提高。
JP摩根(J.P. Morgan)对Rio Tinto的评级是增持，10月18日JP摩根将该公司的股价目标从96澳元上调到105澳元。摩根表示，上调评级和股价目标的主要动力是矿石价格强劲的近期和长期前景。JP摩根预计明年矿石价格将上涨7.5%，但也不排除涨幅超过10%的可能。
瑞银(UBS)分析师格里恩?劳考克(Glyn Lawcock)说，近期而言，矿石谈判将是影响Rio Tinto股价的最大因素之一。瑞银对Rio Tinto的评级是买进，对其12个月股价目标的预期是95澳元。
美林(Merrill Lynch)分析师对Rio Tinto的评级是买进，股价目标是95澳元。该公司10月10日表示，已将2007年矿石价格预期从持平上调到上涨5%。
Stephen Bell
