Rio Tinto (ASX:RIO) share price at 10-month lows. What's next?

What can investors expect from Rio Tinto in the short to medium term?

| 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

The Rio Tinto Limited (ASX: RIO) share price is struggling to entice buyers as it hovers around 10-month lows of $106.73.

Female worker in hard hat puts thumb down while on the phone

Image source: Getty Images

What's next for the Rio Tinto share price?

Brokers think it's time to sell

In the Motley Fool's latest brokerage notes for Rio Tinto, UBS analysts are sell-rated with a $102.00 target price.

The broker flagged that Rio Tinto might miss its iron ore production guidance for the calendar year.

This view is consistent with the company's mixed half-year results commentary.

Rio said that iron ore shipments decreased 3%, driven by "lower production following sustained wet weather, particularly at West Pilbara and Robe Valley operations, shutdowns to enable new replacement mines to be tied in, processing plant availability and cultural heritage management".

UBS also noted rising supply and falling demand for iron ore as another drag on the Rio Tinto share price.

Iron ore weakness to persist

Iron ore prices have plunged in recent weeks, in the wake of China's plans to curtail its steel production.

An article featured on Mining.com said the Chinese government had asked major producers in Tangshan city to "suspend operations for a week in August in order to reduce emissions as the Chinese steel sector makes up 15% of the country's total carbon emissions".

The article also quoted analysts from UBS who warned about weaker iron ore prices in the near term.

In a broker note, the UBS analysts said: "We expect China's steel curtailments to be targeted in 4Q when demand slows seasonally and air pollution is in focus (especially ahead of the Winter Olympics in Feb-22) and as a result we expect prices to stabilize in Sept/Oct before continuing to fall back below $100/tonne in 2022."

Rio Tinto share price snapshot

In late July, the Rio Tinto share price hit a new all-time record of $137.33.

Motley Fool contributor Kerry Sun 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 Bruce Jackson.

More on Broker Notes

Three people in a corporate office pour over a tablet, ready to invest.
Broker Notes

Brokers name 3 ASX shares to buy right now

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

Read more »

Person with thumbs down and a red sad face poster covering their face.
Broker Notes

6 ASX 200 shares downgraded by the experts this week

Brokers have reduced their ratings on six ASX 200 shares, including PLS Group and Westpac this week.

Read more »

Sell buy and hold on a digital screen with a man pointing at the sell square.
Broker Notes

Should you buy Wesfarmers shares amid rising profits and revenues?

A leading analyst offers his outlook for Wesfarmers shares.

Read more »

A man sits in deep thought with a pen held to his lips as he ponders his computer screen with a laptop open next to him on his desk in a home office environment.
Broker Notes

Buy, hold, sell: Evolution Mining, Netwealth, and Nufarm shares

What is Morgans saying about these popular shares? Let's dig deeper into things.

Read more »

Health professional looking at a laptop.
Broker Notes

Is the Telix share price heading to $19? This broker thinks it is

Bell Potter remains bullish on this name. Here's what it is saying.

Read more »

Happy man working on his laptop.
Broker Notes

Broker says this ASX 200 stock can deliver a 20% return

Bell Potter is bullish on this fintech stock. Let's see what is saying about this one.

Read more »

A man holding a cup of coffee puts his thumb up and smiles with a laptop open.
Broker Notes

ASX 200 shares with renewed buy ratings this week

Brokers have signalled ongoing confidence in Zip, ANZ, Coles, and several other ASX 200 shares.

Read more »

Comical investor reading documents and surrounded by calculators.
Broker Notes

4 ASX 200 shares newly upgraded this week

As the Iran war and fuel crisis continues, some ASX 200 shares have attracted upgrades from the experts.

Read more »