The Rio Tinto Ltd (ASX: RIO) share price has recovered some of its sharper early morning losses but remains down 0.9% in early afternoon trading on Wednesday.
At the current $112.20 share price, the S&P/ASX 200 Index (ASX: XJO) miner is now down 9.1% since last Wednesday's opening bell.
So, what's going on?
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Why is the ASX 200 mining stock under pressure?
Rio Tinto doesn't solely mine iron ore.
The company also earns significant revenue from its copper and aluminium production.
But iron ore remains its largest revenue earner. Hence the price of the industrial metal has a large impact on the Rio Tinto share price.
Last Thursday, the miner reported record first-quarter iron ore shipments for the three months ending 31 March. And Rio received an average price of US$125 per dry metric tonne for the metal.
Which gives us some insight into why the Rio Tinto share price, alongside the other iron ore giants, has been selling off.
Not the record production, mind you.
But the price of iron ore, which has been falling hard since notching recent highs of US$132 per tonne on 15 March.
The price of the industrial metal slid another 2% overnight to US$102 per tonne. It was just last Wednesday that it was trading for US$120 per tonne.
Now that's still well above the recent lows of US$78 per tonne posted in early November.
But with Chinese steel mills cutting back production and steel prices remaining depressed, the hoped-for resurgence in demand from the world's number two economy's reopening hasn't played out the way many analysts expected.
And in what could throw up more headwinds for the Rio Tinto share price, analysts at Citi forecast the iron ore price could retrace to US$90 per tonne before finding support.
"We have been cautious on China's steel demand and iron ore amid an uneven economic recovery and heightened policy risk, though things have unravelled sooner than our base case," Citi analyst Wenyu Yao said.
But Goldman Sachs, for one, doesn't appear to be fazed by the short-term pullback in iron ore prices.
Goldman has a buy rating on Rio Tinto shares with a $136.20 price target. That represents a 21% upside from current prices.
Rio Tinto share price snapshot
As you can see in the chart below, the Rio Tinto share price remains up 3% over the past 12 months, despite the recent pullback.
Shares in the ASX 200 miner have gained 27% since iron ore's recent lows on 1 November.
