Insights

Why did the Rio Tinto (ASX:RIO) share price climb today?

Iron ore to the fore once more?
The post Why did the Rio Tinto (ASX:RIO) share price climb today? appeared first on The Motley Fool Australia. –

The Rio Tinto Ltd (ASX: RIO) share price closed higher on Monday, finishing the day up 1.48% to $96.44.

It’s a small but welcome spike for the mining giant which has been swimming in a sea of red over the last three months.

Let’s take a closer look at what happened with Rio’s shares today.

What’s up with the Rio Tinto share price?

Rio shares edged higher despite there being no market-sensitive information for the company today.

In its absence, we have to look to the underlying commodity markets to decipher what forces may be at play.

According to its financial statements, Rio derived over 62% of its revenue in 1H 2021 from iron ore with aluminium sales coming in a distant second at 17%. It also derived 75% of its 1H earnings before interest, tax, depreciation and amortisation (EBITDA) from iron ore.

The price of iron ore fell off the cliff in August amid efforts in China to curb steel production and control carbon emissions.

More than 80% of China’s steel mills suspended production in September for maintenance work. That, coupled with the debt crisis facing Chinese property firms, saw iron ore prices tumble more than 54%, or US$119.5/tonne, from July to the end of September.

However, it has since made a slight recovery, bouncing off its lows of US$103/tonne on 22 September to now trade around 9% higher at US$112/tonne.

Rio is considered a price taker on iron ore, given it is an ASX resource share that produces the commodity. It has no real pricing power in the iron ore markets.

As such, its share price can and does fluctuate with volatility in broader commodity markets and with iron ore in particular.

It’s also worth noting that today’s gains appeared to carry across the wider ASX iron ore and metals’ basket as well.

For instance, the S&P/ASX 300 Metals & Mining Index (XMM) closed 1.34% higher while fellow iron ore heavyweights Fortescue Metals Group Ltd (ASX: FMG) and BHP Group Ltd (ASX: BHP) each ticked into the green today.

Rio Tinto share price snapshot

The Rio Tinto share price has struggled this year to date, having posted a loss of 15% since January 1. This appears to be driven by the decrease in iron ore prices.

As such, it has only climbed 1.09% into the green over the past 12 months.

Each of these results are well behind the S&P/ASX 200 Index (ASX: XJO)’s return of around 21% in that time.

The post Why did the Rio Tinto (ASX:RIO) share price climb today? appeared first on The Motley Fool Australia.

Should you invest $1,000 in RIO Tinto right now?

Before you consider RIO Tinto, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and RIO Tinto wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Rio Tinto (ASX:RIO) share price threatens fresh year-to-date low

ASX 200 (ASX:XJO) midday update: BHP and Rio Tinto fall, Qantas higher

5 things to watch on the ASX 200 on Friday

Rio Tinto (ASX:RIO) share price dips amid pledge to halve direct emissions by 2030

These are the 5 highest yielding dividend stocks in the ASX 200

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!