The Rio Tinto Limited (ASX: RIO) share price has had a tough time this month.
After closing yesterday’s session at $95.71, shares in the mining giant have now tanked more than 13% in September.
Let’s take a closer look.
Why is Rio Tinto coming under so much pressure?
Several catalysts appear to be weighing down the Rio Tinto share price, including the plunging iron ore price.
The iron ore price dropped to $US90 a tonne yesterday, marking a 60% decline since its record high in May. With Chinese demand for the commodity dampening, the Rio Tinto share price has headed south as well.
According to Reuters, China released a report stating its steel output reached its lowest point since March 2020 last month.
This impacts Australia’s iron ore miners greatly as around 80% of the iron ore exported from Australia goes to China, according to the Minerals Council of Australia.
In addition, shares in Rio Tinto have also been spooked recently by fears that one of China’s biggest property developers could go under.
How did Rio Tinto perform in FY21?
Shares in Rio peaked immediately after the company released its half-year report for FY21.
For the 6 months ending 30 June, the mining giant reported a 71% increase in consolidated sales revenue of US$33.1 billion.
Thanks to surging iron ore prices, the miner recorded a 262 increase in free cash flow of US$10.2 billion.
As a result, Rio Tinto declared a fully franked interim dividend of $3.76 per share, plus a special dividend of US$1.85 per share.
Rio Tinto share price snapshot
Since reporting its half-year results, shares in Rio Tinto have come under pressure.
At one point in August, the Rio Tinto share price was flying more than 16.5% higher year to date.
However, shares in the mining giant recently broke below $100 for the first time since November 2020.
As a result, the Rio Tinto share price has given back much of its gains and now is trading more than 17% lower for the year.