From Morgan Stanley:
Iron ore has seasonally weak 1Q: The 1Q report shows Iron ore sales of 73Mt annualising 17% below guidance, while Pilbara production of 71Mt was 14% below. The Pilbara production rate needs to average 345Mtpa for the next three quarters and group sales need to average 370Mtpa vs a 360Mtpa name plate. It was a particulary wet quarter, and a train derailment is a non recurring factor, so we anticipate improvement through the year. Also there are several million tonnes of stockpile to utilise in reaching the sales target as reducing working capital remains a focus for the company. But we do see some risk to the target at this time.
They are saying that RIO will have to sell over 90mt tonnes per quarter for the next three quarters to meet its annual target. Q1 was 73mt.
You do the math!
