Market unmoved by iron ore producer’s announcement given global commodity markets were in turmoil for most of 2022
Kumba Iron Ore expects headline profit to drop by as much as 44% in the year ended December as the result of lower iron ore prices and lower sales, though its shares rallied after an initial jolt.
The shares price dropped as much as 3% after the announcement before rebounding to close more than 4% higher on the day. The price of iron ore, the key input in the production of steel, fell sharply in 2022 as China battled bouts of Covid-19 cases and locked down the country, choking demand. But authorities began easing the restrictions before abandoning them altogether in January, sparking a rally in spot prices, which substantially boosted Kumba.
Still the state-owned ports and rail operator, the mining industry and other stakeholders joined forces in December in an attempt to improve the reliability of the network, which has been hamstrung by vandalism, theft and a shortage of locomotives.
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