Anglo, Rio wary about commodities recovery

Mining groups Anglo American Plc and Rio Tinto are wary about when hard-hit commodity markets might recover, but are confident about the long-term health of the sector, they said on Tuesday.

Rival Xstrata, which along with its rivals gave presentations at Merrill Lynch's mining conference in Barcelona, said early signs pointed to China driving a rebound in commodities demand, but did not say when recovery might take hold.

Anglo Chief Executive Cynthia Carroll said there was scant signs of an early rebound in demand.

"Demand is likely to remain weak in the near term and timing for recovery remains uncertain," said a presentation on Anglo's website for Carroll's speech at the conference, to which media were not invited.

A chart showed demand for copper was expected to fall 7 percent this year, iron ore by 8 percent and platinum by 9 percent. At the same time, Chinese steel inventories have shot up by 56 percent, another graph showed.

Rio CEO Tom Albanese told the conference that the outlook remained uncertain despite some signs of recovery.


WORST OVER FOR CHINA

"For China the worst may be over, but downside risks remain," a Rio presentation said, referring to signs of improvement in most recent Chinese data.

"The long-term story remains intact. Urbanisation in developing countries will not be derailed by the current downturn," Albanese's presentation added.

Xstrata's CEO Mick Davis also held up China as a positive sign, pointing out that the speed of recovery in emerging so-called BRIC (Brazil, Russia, India and China) nations would be different than for OECD countries.

"Key Chinese growth drivers of domestic consumption and fixed asset investment remains resilient," the presentation said.

The "stronger for longer" thesis -- which argued that resilient demand emerging nations would keep metals prices above long-term historic levels -- was still intact, he added.


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