Why has the Rio Tinto share price dumped 14% in a month?

Here’s what has been weighing on the iron ore giant lately.

| More on:

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The Rio Tinto share price has slumped 14% over the past month to close yesterday's session at $104.40
  • Its tumble was partly spurred by the release of its latest quarterly production results
  • Additionally, the value of iron ore, aluminium, and copper has fallen in recent weeks

It’s been a disappointing 30 days for the Rio Tinto Limited (ASX: RIO) share price.

Before market open today, Rio Tinto shares are $104.40 apiece, 14.19% lower than this time last month.

For comparison, the S&P/ASX 200 Index (ASX: XJO) has tumbled 6.24% in that time.

So, what’s driven the iron ore giant to underperform the market recently? Let’s take a look.

What’s been going wrong for Rio Tinto stock?

There are two major happenings that have likely been weighing on the Rio Tinto share price lately.

The release of the company’s production results for the first quarter of 2022 was the first.

Its production of iron ore and aluminium slumped over the three months ended 31 March, while its copper production recorded an increase.

Still, the company didn’t drop its financial year 2022 production guidance on the back of the disappointing quarter.

But that wasn’t enough to sate the market. The Rio Tinto share price slid 2.7% following the update on April 20.

Secondly, the price of iron ore is currently sitting at around US$125 a tonne, down from around US$150 a tonne this time last month, according to Trading Economics.

Much of the steel-making ingredient’s slump was seemingly due to rising COVID-19 cases in China and resulting continuing lockdowns.

The price of aluminium and copper also tumbled over the period.

Rio Tinto share price snapshot

Rio Tinto’s stock is recording a mixed performance over the long term.

It is currently 4.7% higher than it was at the start of 2022. That means it’s outperformed the ASX 200 by around 11% this year so far.

However, it has tumbled 17% over the past 12 months. Meanwhile, the index has gained 1%.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Resources Shares

Top asx share price represented by paper cutout image of mountain peaks with red flag
Resources Shares

What was the highest Rio Tinto share price ever recorded?

Two major spikes in the Rio Tinto share price over its 50-year history on the ASX were caused by the…

Read more »

Resources Shares

Why are Sayona Mining shares the most actively traded of the All Ords today?

Sayona gives back gains earned in yesterdays session.

Read more »

A group of people in suits and hard hats celebrate the rising share price with champagne.
Resources Shares

Which ASX 200 mining share offers the best dividend yield for FY22?

Top brokers are forecasting dividend yields of 14% to 17% from the big three ASX 200 miners in FY22.

Read more »

Happy woman miner with her thumb up signalling Wyloo's commitment to back IGO's takeover of Western Areas nickel

Own BHP shares? Here’s how the ASX 200 miner plans to slash emissions

Miners have come under pressure around the globe to mitigate the environmental impacts of their operations.

Read more »

a woman stands next to a large green battery smiling and eating an apple with a lifting green arrow line in the background, indicating rising stock prices.
Resources Shares

After the sell-off, experts think these 2 lithium ASX stocks are great buys

Brokers think that these ASX lithium stocks could charge up returns.

Read more »

Three happy men with moustaches cooking on a BBQ with flames leaping up.
Ask a Fund Manager

‘Extremely cheap’: expert names 3 ASX shares hot to buy now

Ask A Fund Manager: Datt Capital's Emanuel Datt puts up a trio of stocks that'll take advantage of the energy…

Read more »

Three coal miners smiling while underground
Resources Shares

Why are ASX 200 coal shares bouncing back on Tuesday?

Coal shares are extending their gains today.

Read more »

A stressed woman with her head in her hands sits at her desk reading about falling ASX 200 mining shares on her laptop
Resources Shares

What’s behind the weakness in ASX 200 mining shares during June?

ASX miners have pared gains in recent weeks.

Read more »