Why are ASX 200 mining shares smashing the benchmark on Wednesday?

Rio Tinto, BHP and Fortescue shares are all charging higher today.

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S&P/ASX 200 Index (ASX: XJO) mining shares are racing ahead of the benchmark in early afternoon trade on Wednesday.

Here's how the big three mining stocks are tracking at the time of writing:

  • Fortescue Metals Group Ltd (ASX: FMG) shares are up 2.02%
  • BHP Group Ltd (ASX: BHP) shares are up 0.8%
  • Rio Tinto Ltd (ASX: RIO) shares are up 1.5%

For some context, the ASX 200 is up 0.3% at this same time.

Here's what's boosting the Aussie mining stocks today.

What's lifting the ASX 200 mining shares?

Iron ore counts as the top revenue earner for all three ASX 200 mining shares.

And copper also brings in many billions of dollars in revenue each year.

After falling below US$100 per tonne on Friday, iron ore has been rallying this week. The steel-making metal gained 3.2% overnight to trade at US$107.20 per tonne.

Copper is also enjoying a strong run. The red metal is trading for US$8,976.50 per tonne, up from US$8,434.50 per tonne a month ago.

The iron ore price has spent much of 2024 retreating, having kicked off the year trading for US$145 per tonne.

Much of that retrace was due to concerns over China's sluggish economic growth outlook impacting the nation's voracious appetite for the steel-making metal.

This week's rebound in the iron ore price – and today's outperformance by the ASX 200 mining shares – follows better-than-expected economic data out of China, released over the weekend.

AS CNBC notes, over the first two months of 2024, Chinese retail sales increased by 5.5%. That topped the 5.2% boost forecast in a Reuters poll.

Importantly for the iron ore market, industrial production was up 7% year on year, far outpacing the consensus estimates of a 5% increase.

In a broader sign that China's economy may be turning the corner, online retail sales of physical goods leapt by 14.4% in January and February compared to 2023 sales.

Commenting on the Chinese data that's offering some tailwinds for ASX 200 mining shares, Goldman Sachs analysts said:

We believe China's sequential growth momentum remained solid in Q1 despite notable divergence across sectors. However, to secure the ambitious 'around 5%' growth target this year, more policy easing is still necessary, especially on the demand-side (eg fiscal, housing and consumption).

Indeed, the data showed real estate investment in China declined 9% in the first two months of 2024 compared to the prior year.

But I expect we'll see more stimulus measures rolled out by the Chinese government to bolster the nation's critical real estate sector.

Any fresh news on that front should support iron ore and copper prices, offering additional tailwinds for the big three ASX 200 mining shares.

Motley Fool contributor Bernd Struben 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.

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