Why is the Rio Tinto share price in the doldrums today?

It's proving a tough day so far for some ASX mining shares.

| More on:

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
  • Rio Tinto shares are falling nearly 2% today 
  • Iron ore producers BHP and Fortescue are also struggling
  • Additionally, the materials sector is descending 1.49%

The Rio Tinto Limited (ASX: RIO) share price is in the red today.

Rio shares are down 1.85% and are currently trading at $90.88. For perspective, the S&P/ASX 200 Index (ASX: XJO) is up 0.2%.

Let's take a look at what might be affecting Rio Tinto shares.

a warehouse worker wearing overalls and a hard hat leans on one of the shelves with schedule in hand and closes her eyes in an unhappy expression.

Image source: Getty Images

What's going on?

The Rio Tinto share price may be down today, but it is not the only ASX mining share struggling. The BHP Group Ltd (ASX: BHP) share price is falling 1.79% at the time of writing, while Fortescue Metals Group Limited (ASX: FMG) shares are sliding 2.44%.

The S&P/ASX 200 Materials Index (ASX: XMJ) is 1.49% in the red today.

Rio, BHP and Fortescue are all huge producers of iron ore, which is used to make steel.

The iron ore November 22 contract on the Singapore Exchange is down 2.49% at the time of writing.

ANZ senior economist Catherine Birch highlighted "sentiment remains fragile" amid property sector concerns. In a research note this morning, Birch said:

Infrastructure is now becoming the most likely sector through which demand for steel and iron ore can receive a boost, but its impact on demand is waning.

In quarterly results last week, Rio Tinto reported a 4% boost in iron ore shipments to 82.9Mt. However, this was below consensus forecasts of 84.5 Mt, as my Foolish colleague James reported at the time.

Despite this, Morgans analysts recently reaffirmed an add rating on the Rio Tinto share price with a $108 price target. This is a nearly 19% upside on the current price. Analysts said:

Putting the 3Q22 result into perspective, we still see RIO boasting solid earnings quality, dividend yield, balance sheet strength and trading at a discount to our $108.00 Target Price. We maintain our Add rating.

Goldman Sachs analysts have also recently maintained a buy rating on Rio Tinto shares with a $112.90 price target.

Rio Tinto share price snapshot

Rio Tinto shares have lost nearly 6% in the past year, while they have descended 9% year to date.

For perspective, the ASX 200 has shed nearly 9% in the past year.

Rio Tinto has a market capitalisation of about $33.7 billion based on the current share price.

Motley Fool contributor Monica O'Shea 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 Share Market News

A woman is excited as she reads the latest rumour on her phone.
Broker Notes

Could these ASX stocks really be set to double after crashing this week?

These companies are expected to rebound.

Read more »

A man in a sweatshirt holds two different phones to compare telco services.
Broker Notes

Forget Rio Tinto and buy this ASX copper share

Bell Potter thinks this stock could be a good alternative to the mining giant.

Read more »

A happy couple drinking red wine in a vineyard.
Broker Notes

2 ASX 200 shares newly upgraded this week

After major company news this week, one stock fell 39% while the other spiked 17%.

Read more »

a woman sits next to her computer screen with her head in her hands with the screens slowing graphs on downward trajectories.
52-Week Lows

Can the beaten-down CSL share price ever reach $300 again?

CSL is near decade lows. Can it ever climb back?

Read more »

A man looking at his laptop and thinking.
Share Market News

5 things to watch on the ASX 200 on Friday

It looks set to be a subdued finish to the week for Aussie investors.

Read more »

Time to sell written on a clock.
Broker Notes

Sell alert! Why this expert is calling time on CBA shares

A leading analyst forecasts headwinds for CBA shares. But why?

Read more »

Three miners wearing hard hats and high vis vests take a break on site at a mine as the Fortescue share price drops in FY22
Share Market News

5 years ago, $5,000 bought 118 BHP shares. How many would it buy now?

The mining giant also pays its shareholders very attractive passive income.

Read more »

Three brightly coloured objects against a backdrop of blue, indication three winning ASX share prices
Share Gainers

Here are the top 10 ASX 200 shares today

It was a lacklustre session on the ASX this Thursday.

Read more »