The Rio Tinto Limited (ASX: RIO) share price is in the green today, up 2% to $118.87 per share.
As one of Australia's iron ore giants, with a market cap of $43.5 billion, Rio Tinto's share price is closely correlated to the price of iron ore.
As you'd expect.
When the industrial metal was trading for some US$220 per tonne back in July last year, Rio Tinto shares were trading north of $132.
As iron ore sank to US$92 per tonne in mid-November, so too did Rio, with the share price dropping to $87.51 on 10 November.
Since then, iron ore has been marching higher. Though it retraced some overnight, it's currently fetching US$147 per tonne.
As for the Rio Tinto share price, it's gained 36% over that same period.
And there could be more outperformance ahead.
Commodities about to enter a 'ripper bullish market'
Jessica Amir, Saxo's Australian market strategist, is broadly bullish on the outlook for commodities in 2022, saying: "We can expect them to continue to rally strongly".
She notes that many investors now view commodities as a safe haven "as they are about to enter a ripper bullish market".
Amir points to the US Federal Reserve's intentions to lift interest rates multiple times as a big factor boosting commodity prices, such as iron ore, in the year ahead. "Looking at every single US Fed hiking cycle, commodities have outperformed equities since 1972," she said.
Iron ore prices, now back to their highest levels since August, got another US-driven boost. This one in the form of tariff rollbacks from duties introduced during trade spats under former President Donald Trump.
"The rally [in iron ore] was fuelled by optimism that steel orders could rise, with the US to announce it will end the 25% tariff on Japanese steel imports," Amir said.
So, what's all this about the Winter Olympics and the Rio Tinto share price?
I'm glad you asked.
Why the end of the Olympics could boost the Rio Tinto share price
If you've been watching the Winter Olympics, hosted by China this year, you may have noticed the often clear blue skies in the background.
That's partly thanks to extraordinary efforts undertaken by the Chinese Government to reduce the nation's notorious air pollution in the lead-up to the global event.
As part of that effort, steel manufacturing was scaled back and iron ore shipments fell accordingly.
When the Olympics wraps up, that manufacturing is expected to ramp back up. The increased demand should in turn see another leg-up for the iron ore price, offering some healthy tailwinds to the Rio Tinto share price.
According to Amir:
The iron ore price is up 74% from its November low, and as iron ore shipments are expected to continue to claw off their low after Beijing Olympics wrap up, iron ore heavyweight stocks BHP and RIO remain in focus.
What can Rio Tinto shareholders expect from iron ore prices in the months ahead?
"From a technical perspective the iron ore price is likely to retract then resume its uptrend toward $170, the next resistance level to watch," Amir said.
