It feels like the Rio Tinto Ltd (ASX: RIO) share price has spent most of this year drifting sideways, despite a solid year-to-date return of 13%.
Encouragingly, Rio Tinto shares closed 2.23% higher today at $131.14, within arms reach of their record high of $132.94.
Rio Tinto share price breaking out?
Resources was the best-performing sector today, with the S&P/ASX Materials (INDEXASX: XMJ) index gaining 1.37%.
Iron ore majors Rio Tinto, BHP Group Ltd (ASX: BHP), and Fortescue Metals Group Ltd (ASX: FMG) led the way, gaining 2.23%, 1.12% and 2.06% respectively.
All three heavyweights are close to retesting previous all-time highs set around May this year.
Supporting today's strong performance is the iron ore spot price. This has continued to remain firm, trading at US$217.94/tonne, according to Market Index.
Since late April, iron ore prices have surged from US$170/tonne to well over US$200/tonne.
However, the Rio Tinto share price has struggled to follow, largely moving sideways.
This could be in response to experts, including the Australian Government's commodity forecaster, Office of the Chief Economist (OCE), and Goldman Sachs predicting iron ore could fall in the short to medium term.
The OCE June quarterly report said: "Prices are forecast to average around US$150 a tonne in 2021, before falling to below US$100 a tonne by the end of 2022, as Brazilian supply recovers and Chinese steel production softens."
It's not all doom and gloom for Rio Tinto shares
Contrary to expectations, Macquarie currently has an outperform rating and $163 target for the Rio Tinto share price.
As covered by my colleague James Mickleboro, the broker believes the iron ore miner could be paying some generous dividends in the near term. It is forecasting a fully franked dividend per share of $13.19 in FY21 and $11.16 in FY22.
At current prices, this translates to yields of 10.07% and 8.52%.
