ASX 200 mining shares including BHP Group Ltd (ASX: BHP) are tumbling on Tuesday after Rio Tinto Ltd (ASX: RIO) released second-quarter results that fell short of some consensus expectations.
Investors appear to feel that Rio's report does not bode well for other ASX 200 mining shares.
The S&P/ASX 200 Materials Index (ASX: XMJ) is the worst performer of the day so far, down 1.12%.
Meantime, the S&P/ASX 200 Index (ASX: XJO) is down 0.13% today.
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What's happening with the ASX 200 mining shares today?
At the time of writing:
- The Rio Tinto share price is down 2.15% to $117.26
- The BHP share price is down 1.63% to $42.96
- The Fortescue Ltd (ASX: FMG) share price is down 0.27% to $22.42
- The Champion Iron Ltd (ASX: CIA) share price is down 2.16% to $6.33
What did Rio Tinto report today?
Rio Tinto released its 2Q FY24 update before the market open on Tuesday.
As my colleague James covered earlier, some of Rio's results fell short of consensus expectations. This has led to a fall in the share price of the ASX 200 mining share.
Rio Tinto reported iron ore production of 79.5Mt in 2Q FY24, up 2% on 1Q FY24 and down 2% on 2Q FY23. This took 1H FY24 production to 157.4Mt, down 2% on 1H FY23.
Iron ore shipments in 2Q FY24 totalled 80.3Mt, up 3% on 1Q FY24 and up 2% on 2Q FY23. This took 1H FY24 shipments to 158.3Mt, representing a 2% decline on 1H FY23.
Consensus expectations among analysts had been 82Mt in shipments for 2Q FY24.
The ASX 200 mining major explained that a train collision in mid-May impacted production and shipments.
Aluminium production was flat at 824kt over 2Q FY24 compared to 1Q FY24 and up 1% compared to 2Q FY23. This took production for 1H FY24 to 1,650kt, up 3% on 1H FY23.
Copper production rose 10% in the second quarter to 171kt and increased 13% over 1H FY24 to 327kt. Consensus estimates were 175kt for 2Q FY24.
Falling iron ore price weighs on ASX 200 miners in 2024
The iron ore price has fallen dramatically in 2024 due to concerns over the Chinese economy.
At the beginning of the year, the iron ore price was about US$144 per tonne. Today, it's US$109.58.
As a result, ASX 200 mining share prices have weakened in the year to date.
Analysts at Trading Economists said the 62% fe iron ore price held steady overnight as investors considered the latest economic data from China.
According to Trading Economics:
Data showed that China's economy grew less than expected in the second quarter amid a persistent property downturn, weak domestic demand and rising trade tensions with the West.
Investors now await the outcome of a key political meeting in Beijing this week where traders are hoping for further stimulus to support the economy.
Westpac Banking Corp (ASX: WBC) forecasts the iron ore price will weaken further in 2024 and 2025.
Rio shares are down 14%, and BHP shares are down 15% year to date. Fortescue shares have lost 23.5%, and ASX 200 mining junior Champion Iron has lost 26.5%.
