Mining investors will be happy today after bellwether miner Rio Tinto Limited (ASX: RIO) saw its shares hit triple digits this morning on the back of rising commodity prices and renewed confidence that the U.S. and China are moving closer to striking a trade deal.
In particular iron ore prices are returning to boom time levels at US$87.52 (A$123.19) a tonne according to Market Index in bullish price moves that bring back memories of the mining boom that saw commodity prices surge to peak levels in 2012.
That boom was brought about by what was thought to be a once-in-a-lifetime construction super cycle in China as iron ore is the key steel-making ingredient required to manufacture the steel pipes that hold together concrete structures.
However, shares like Rio, BHP Billiton Limited (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG) are moving higher today due to supply shortages out of Brazil (rather than news out of China) after Brazil's lead miner Vale S.A. had restrictions placed on its after a dam it operated collapsed and killed more than 300 people.
Rio has certainly been splashing the cash recently with $13.5 billion returned to shareholders in 2018, although which way its share price goes from here remains dependent on the commodity price cycle.
