Yahoo Finanza Why Rio Tinto Stock Is Testing Multi-Year Highs?
Rio Tinto Video 16.02.21.
Strong Commodity Prices Push Rio Tinto Shares To New Highs
Shares of Rio Tinto are testing multi-year highs as commodity markets continue to rally on stimulus optimism. Copper has not traded at current levels since 2012 while iron ore prices are at high levels due to weaker-than expected production results from Brazil’s Vale which were reported earlier this month.
In addition, strong results from Rio Tinto’s peer BHP boosted market sentiment towards major miners. BHP reported solid profits for the first half of the 2021 financial year and announced a record dividend as its results were boosted by favorable commodity prices.
Rio Tinto will report its 2020 full-year results tomorrow, and traders are speculating that they will be similar to results of BHP.
What’s Next For Rio Tinto?
The current rally in the copper market looks very strong, and analysts are rushing to update their price targets for copper-related companies. Copper is boosted by demand from electric vehicles and renewable energy projects which is expected to grow in the upcoming years.
Meanwhile, few major copper projects are developed around the world. In addition, it’s often challenging to finish such projects as Rio Tinto learned with its Oyu Tolgoi project in Mongolia which suffered cost overruns, delays and legal uncertainty.
The current situation in the iron ore market is not as bullish compared to copper market but iron ore continues to enjoy strong demand. In addition, many analysts are talking about the potential start of the new commodity super cycle which should be boosted by rampant money-printing from the world central banks. In short, the current market mood in the commodity space is bullish, and even oil managed to get to the $60 level despite weak demand from Europe.
In this environment, shares of Rio Tinto have a good chance to gain additional upside momentum.
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This article was originally posted on FX Empire
