Rio Tinto on watch after downgrading Pilbara iron ore shipments guidance

The Rio Tinto Limited (ASX:RIO) share price will be on watch on Tuesday after downgrading its iron ore shipments guidance from the Pilbara…

| More on:
a woman

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

The Rio Tinto Limited (ASX: RIO) share price will be one to watch on Tuesday.

This morning the mining giant provided the market with an update on the impact of Tropical Cyclone Damien on its iron ore operations in the Pilbara.

What did Rio Tinto announce?

According to the release, Rio Tinto's iron ore operations in the Pilbara region of Western Australia are progressively resuming following the passing of Tropical Cyclone Damien.

The cyclone has negatively impacted Rio Tinto by causing infrastructure damage across its entire Pilbara network. This includes impact to infrastructure such as access roads, electrical and communications infrastructure, and employee accommodation.

Management warned that all of Rio Tinto's mine sites experienced some form of disruption and will take time to return to normal operations.

Iron ore shipments guidance downgrade.

As a result of the disruption that its operations have faced, Rio Tinto has been forced to downgrade its Pilbara shipments for 2020.

Management now expects Pilbara shipments to be in the range of 324 million tonnes and 334 million tonnes (100 per cent basis) this year. This compares to its previous guidance of between 330 million tonnes and 343 million tonnes. Which represents a 2% downgrade on the low end of its guidance range and a 2.6% downgrade at the high end of its range.

The company advised that it is working with its customers to minimise any disruption in supply. But it reiterated that safety remains its top priority as it ramps up operations and undertakes the necessary remediation work.

This news could give the Fortescue Metals Group Limited (ASX: FMG) share price a boost on Tuesday. Given how tight supply and demand have been over the last 12 months, any supply disruptions could be supportive of higher iron ore prices in the coming months.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 man in a business suite throws his arms open wide above his head and raises his face with his mouth open in celebration in front of a background of an illuminated board tracking stock market movements.
Broker Notes

Analysts say these ASX shares are top buys in June

Brokers are urging investors to buy these shares. Let's find out why.

Read more »

Ten happy friends leaping in the air outdoors.
Share Gainers

Here are the top 10 ASX 200 shares today

Investors finished the trading week on a high note this Friday.

Read more »

A man in trendy clothing sits on a bench in a shopping mall looking at his phone with interest and a surprised look on his face.
Broker Notes

Brokers name 3 ASX shares to buy today

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why Brainchip, Findi, Lottery Corp, and REA shares are falling today

These shares are ending the week in the red. But why?

Read more »

Happy teen friends jumping in front of a wall.
Share Gainers

4 ASX 200 shares leading the charge higher this week

Investors have been piling into these four ASX 200 shares this week. But why?

Read more »

Woman and man calculating a dividend yield.
REITs

What price target does Macquarie have on Goodman Group shares?

Goodman Group posted an interesting set of numbers in Q3. Here's Macquarie's take.

Read more »

A happy investor sits at his desk in front of his laptop and does the mexican wave with his arms to celebrate the returns from his ASX dividend shares
Share Gainers

Why Catapult, Champion Iron, Healthco, and Meeka Metals shares are pushing higher today

These shares are ending the week on a high. But why?

Read more »

Miner looking at a tablet.
Broker Notes

Why Macquarie expects this ASX 200 copper stock to surge 36% in a year

Macquarie forecasts some hefty gains ahead for the ASX 200 copper miner. But why?

Read more »