Rio Tinto (ASX:RIO) share price in focus following Q3 update

The Rio Tinto Limited (ASX:RIO) share price will be in focus on Friday after the release of its third quarter update. Here’s how it performed…

| More on:
Rio Tinto share price

The Rio Tinto Limited (ASX: RIO) share price will be on watch this morning following the release of its third quarter production update.

How did Rio Tinto perform in the third quarter?

For the three months ended 30 September, Rio Tinto reported Pilbara iron ore shipments of 82.1Mt.

This was a 5% decline on the prior quarter and a touch lower than expectations. Goldman Sachs, for example, was forecasting iron ore shipments of 83.3Mt for the quarter. Management advised that this reduction in shipments was due to planned maintenance activity in its port.

However, iron ore production was strong at 86.4Mt. This was a 4% lift on its second quarter production. Management notes that its Pilbara operations are returning to more normal operating conditions with rosters back to pre-COVID-19 settings.

Rio Tinto’s mined copper came in a 129.6kt for the quarter. While this was down 2% on the prior quarter due to smelter issues at Kennecott, it was significantly higher than the 91kt predicted by Goldman Sachs. And given the recent strength in the copper price, this can only be good news for shareholders.

Elsewhere, Rio Tinto reported a 1% decline in Bauxite production to 14.5Mt, a 2% lift in Aluminium production to 797kt, and a 12% increase in Titanium dioxide slag production to 293kt.

Market conditions.

Management provided commentary on market conditions in the third quarter and its expectations for the months ahead.

It commented: “Global economic activity in the third quarter was generally strong, helping to sustain optimism for a widespread recovery in 2021. However, recent high-frequency data suggests that the rate of recovery in growth is slowing in most economies, with pent-up demand dissipating, and the rise of renewed lockdowns threatening recovery.”

The company also spoke about iron ore demand, which has been incredibly strong recently.

Management advised: “Chinese iron ore demand is at record levels against a backdrop of recovering seaborne supply that was disrupted earlier in the year.”

“However, with the major producers expected to deliver strong volumes in the fourth quarter, iron ore inventories are expected to grow modestly as China’s steel consumption eases from record highs and scrap consumption increases. Japan, South Korea, Taiwan and Europe continue to show signs of recovery: however, exChina steel production remains down significantly year on year,” it added.

Outlook.

Rio Tinto has made no major changes to its production guidance for the remainder of FY 2020.

It continues to expect Pilbara iron ore shipments of 324Mt to 334Mt this year, up from 327Mt in FY 2019. And mined copper is expected to be in the range of 475kt to 520kt.

Its cost guidance for both remains unchanged as well. Pilbara iron ore unit cost guidance remains $14 to $15 per tonne and copper C1 unit cost guidance stays at 120-135 US cents per pound.

This guidance is based on an average Australian dollar exchange rate of US$0.67.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of January 12th 2022

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

a group of people gathered around a laptop computer with various expressions of interest, concern and surpise on their faces. All are wearing spectacles.
Broker Notes

Broker says Life360 (ASX:360) share price has ~80% upside

The Life360 Inc (ASX: 360) share price was one of the best performers on the Australian share market in 2021. …

Read more »

best asx shares represented by best in show ribbon
Broker Notes

3 ‘champion stocks’ for ASX investors in 2022

If you’re a fan of buy and hold investing, then you may want to look at the “champion stocks” listed …

Read more »

Young woman in yellow striped top with laptop raises arm in victory
Share Gainers

These were the best performing ASX 200 shares last week

The S&P/ASX 200 Index (ASX: XJO) had a week to forget after the US Federal Reserve indicated that it would start to …

Read more »

asx share price falling lower represented by investor wearing paper bag on head with sad face
Share Fallers

These were the worst performing ASX 200 shares last week

It was another tough week for the S&P/ASX 200 Index (ASX: XJO) after the US Federal Reserve indicated that it would start …

Read more »

a group of stockbrokers sit in a room with a computer and writing on a wall in chalk indicating calculations and graphs while discussing something on the computer screen.
Broker Notes

Here’s what 67% of brokers think of the current IAG (ASX:IAG) share price

Key points The IAG share price traded up today IAG has made a solid start to the year having rallied …

Read more »

Top 10 - asx shares today
Share Market News

Here are the top 10 ASX shares today

Today, the S&P/ASX 200 Index (ASX: XJO) fought back against the selling pressure throughout the day to finish in the green. …

Read more »

The word inflation written with a ticking time bomb.
Share Market News

Why is it when Jerome Powell sneezes, the ASX 200 catches a cold?

Key points The ASX 200 took a hit following comments from the United States Federal Reserve chair Jerome Powell Expectations …

Read more »

A female financial services professional with a manicured black afro hairstyle turns an ipad screen to show a client across the table a set of ASX shares figures in graph format
Bank Shares

Goldman tips Bank of Queensland (ASX:BOQ) share price to rise 25%

If you’re interested in gaining exposure to the banking sector, then it could be worth considering Bank of Queensland Limited …

Read more »