Rio Tinto share price: will the sale continue?
- Rio Tinto (ASX: RIO) share price drops to AU $ 95.42 per share on Tuesday
- Iron ore prices rebounded on Monday, although caution persisted
- Rio announces weak production figures for its third quarter
- Want to take advantage of the drop in the Rio Tinto share price? Open an account with us to sell the stock now.
Rio Tinto Share Price Analysis: What’s New?
At Monday’s close, Australian mining and energy stocks ended broadly higher, supported by strength in underlying commodity prices.
In particular, iron ore futures rebounded from their deadly losses last week, Reuters reported.
Shares of heavyweight miner Rio Tinto climbed around 1.8% to an intraday high of A $ 96.76 on Monday afternoon. ASX-listed stock edged down to end the day at A $ 96.44, up 1.5% from Friday, recouping some losses from last week’s sell-off.
On Tuesday, the RIO counter was trading down 1.1% to AUS $ 95.42 at 1:17 p.m. AEST in Sydney.
Of 16 analysts, eight recommended âbuyâ, seven rated the stock âholdâ and one said âsellâ. Their 12-month average price target for shares of the world’s second-largest metals and mining company was A $ 106.97, according to Bloomberg data.
Over the past week, bullish âoutperformâ or âbuyâ calls have come from Macquarie and Goldman Sachs, with target prices of A $ 133 and A $ 121 respectively. Bernstein recommended “market performance” with a target of A $ 87, while Shaw and Partners said “hold” while aiming for A $ 100 per share.
Iron ore prices: what contributed to their recovery?
Benchmark iron ore prices fell to multi-week lows last week. On October 21, 2021, the most-traded January contract on the Dalian Commodity Exchange of China fell to its lowest level in a month.
Dalian iron ore futures rose on Monday, with the January contract ending up 1.7%, Reuters reported.
Sentiment over the steel ingredient had improved after beleaguered Chinese real estate developer Evergrande appeared to have avoided the default. Analysts also pointed out that the latest weekly industry data set showed a drop in iron ore shipments from Australia and Brazil to China.
However, caution and concerns over declining demand for steel in China continued to contain general enthusiasm, Reuters added.
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Rio Tinto production drops in the third quarter of 2021
Earlier this month, Rio CEO Jakob Stausholm said the third quarter of 2021 “has been another operationally difficult quarter,” although there has been an improvement from the three-month previous ones.
Production figures for Pilbara iron ore, aluminum, mined copper and bauxite fell 3-4% from 3Q 2020. Titanium dioxide slag was down 29% year-on-year .
Rio also reduced its annual forecast for Iron Ore Company of Canada pellets and concentrates to 9.5 to 10.5 million tonnes, from 10.5 to 12 million tonnes previously.
The forecast for refined copper was lowered to 190,000 to 210,000 tonnes, due to a smelter incident in September.
On Monday, JPMorgan analysts kept their rating of “overweight” RIO stock while targeting AUD 113 per share, citing weak third-quarter production as well as iron ore and copper reduction forecasts.
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