Futures & Commodities

Rio Tinto posts sharp rise in iron ore output

Rio Tinto on Thursday posted a sharp rise in second quarter iron ore output from a year ago as it battled to maintain its top market position in China, even as selling prices deteriorate and bad weather disrupted operations.

But the world's second-biggest iron ore miner was forced to trim it full year guidance for ore shipments by nearly 3 percent to around 340 million tonnes after two cyclones swept through its mines and ports in March and May.

Ian Waldie | Bloomberg | Getty Images

Second quarter iron ore output was still 9 percent higher than the same quarter of 2014 at 79.7 million tonnes and 7 percent above the first quarter of 2015, data released by the Anglo-Australian company showed.

The result was as in line with analysts expectations of around 80 million tonnes, including Rio Tinto's partners in some mines.

Read MoreWhat iron ore's 10% rebound means

"We have maintained our emphasis on efficiency and protecting returns, which is reflected in this solid production performance, "Chief Executive Sam Walsh said in a statement.

Iron ore staged a modest recovery in June but tumbled to a decade low near $44 a tonne last week, as inventories at Chinese ports swelled and demand from Chinese steel mills waned.

Amid lower margins, Rio and rival BHP Billiton have been producing at full tilt to boost profits, but are facing a fightback from Brazil's Vale, the world's biggest producer.

More pain in store for iron ore prices

The fight for China's market has turned the global seabourne iron ore trade into an oligarchy, according to Citigroup analyst Ivan Szpakowski, with the highest market concentration of any major commodity.

Read MoreWhat China's stocks tumble means for Western firms

Vale and BHP are also expected to show sharp lifts in quarterly production in coming days.

Rio said it lost about 7 million tonnes of shipping capacity at its ports due to the severe weather when tropical cyclones Olwyn and Quang hit the Pilbara iron ore belt, where most of Australia's ore is mined.

Heavy inland rains also hindered trucking operations, resulting in lost production at the mines and impacting the ability to operate rail haul lines according to scheudle, it said.

Rio's forecast for 340 million tonnes in full-year shipments would still be up 15 percent on 2014.