Three of the largest ASX materials shares by market cap are Fortescue Metals Group (ASX: FMG), Rio Tinto Ltd (ASX: RIO) and BHP Group (ASX: BHP).
In fact, BHP is the second largest company on the ASX.
Because large materials stocks often make up a significant share of major indices, strong or weak performance in these companies can materially influence overall portfolio returns, particularly for investors with broad market or index-based exposure.
Fortunately for holders of materials stocks in 2025, it's been a positive year.
How have materials shares performed in 2025?
The S&P/ASX 200 Materials (ASX:XMJ) index has significantly outperformed the ASX 200 this year.
It has risen almost 31% since the start of the year.
This has been influenced by rocketing gold and silver prices. Many mining stocks have also been, benefiting from soaring copper prices and a resilient iron ore price.
For context, the S&P/ASX 200 Index (ASX: XJO) is up a modest 6.4%.
This was influenced by positive gains from Rio Tinto, Fortescue Metals and BHP shares.
The best performing amongst the three has been Rio Tinto shares.
The metals and mining company started the year trading at approximately $118 per share.
Yesterday, Rio Tinto shares closed at more than $146 each.
This is good for a gain of more than 24% in 2025.
While not as profitable, it's also been a strong year for Fortescue Metals shares which are up approximately 16% this year.
Finally, BHP shares have also performed well, rising approximately 13.75% year to date.
Is there any more upside?
After a strong year, is it worth considering buying shares in these mining giants?
It appears fresh headwinds may be coming in the new year.
Westpac has warned that a significant projected rise in global iron ore supply in 2026, alongside substantial cuts to Chinese steel output, could lead to a 20% drop in iron ore prices, according to The AFR.
At the time of writing, broker Bell Potter has a sell recommendation on Fortescue Metals shares.
This is along with a price target of $19.30, which indicates a downside of more than 12% from yesterday's closing price of $22.
Elsewhere, analyst ratings via TradingView indicate that Rio Tinto and BHP shares are trading close to fair value.
It lists a one year price target for BHP shares at $45.02 which is roughly 1% lower than current levels.
The one year price target for Rio Tinto shares indicates approximately 5% downside from yesterday's closing price.
