Rio Tinto Limited (ASX:RIO) Lowers Iron Ore Forecast

Rio Tinto Limited (ASX:RIO) Lowers Iron Ore Forecast

Rio Tinto Limited (ASX:RIO) Lowers Iron Ore Forecast

  • Rio Tinto lowered its forecast for iron ore shipments on Tuesday by up to 10m tonnes — but analysts said the revised estimate would not stop the Anglo Australian mining group returning cash to shareholders and could help support the price of the commodity.
  • Rio said it would export 330m tonnes of the steelmaking ingredient in 2017, mainly to customers in China, rather than 330m-340m tonnes. The company blamed bad weather and work to modernise its rail haulage lines in Western Australia, where its biggest mines are located.
  • Rio Tinto chief executive J-S Jacques said “This was a solid quarter for production, including record output at our bauxite operations. Iron ore production was in line with last year, although iron ore shipments were impacted by an acceleration in our rail maintenance programme following poor weather in the first quarter.
  • We believe our focus on capital discipline, maximizing cash flow from operations, driving productivity and portfolio shaping will continue to support the delivery of strong cash generation and shareholder returns.

Rio Tinto Limited (Rio Tinto) is a mining company. The Company is focused on finding, mining and processing of mineral resources. Its segments include Iron Ore, Aluminum, Copper & Diamonds, Energy & Minerals, and Other Operations. Its products include aluminum, copper, diamonds, gold, industrial minerals (borates, titanium dioxide and salt), iron ore, thermal and metallurgical coal, and uranium. The Iron Ore product group’s operations are located in the Pilbara region of Western Australia. The Company’s business includes bauxite mines, alumina refineries and a range of aluminum smelters. The Copper & Diamonds product group has managed operations in Australia, Canada, Mongolia and the United States, and non-managed operations in Chile and Indonesia. The Energy & Minerals has operations across six sectors: borates, coal, iron ore concentrate and pellets, salt, titanium dioxide and uranium.

Overall, the bias in prices is: Upwards.

Short term: Prices are stalling.

Intermediate term: Prices are trending.

By the way, prices are vulnerable to a correction towards 63.01.

The projected upper bound is: 67.07.

The projected lower bound is: 61.87.

The projected closing price is: 64.47.

RIO TINTO FPO closed down -0.120 at 64.380. Volume was 38% below average (neutral) and Bollinger Bands were 27% wider than normal.

Open         High          Low            Close         Volume
64.200      64.840      64.200      64.380      1,484,741

Technical Outlook
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period     50-period       200-period
Close:                       65.21             62.58              60.59
Volatility:                14                   27                    33
Volume:                  1,659,156      2,330,230      2,410,761

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

RIO TINTO FPO is currently 6.3% above its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect moderate flows of volume into RIO.AX (mildly bullish). Our trend forecasting oscillators are currently bullish on RIO.AX and have had this outlook for the last 11 periods. our momentum oscillator has set a new 14-period low while the security price has not. This is a bearish divergence.

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 25.1305. This is not an overbought or oversold reading. The last signal was a sell 5 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 55.17. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 41 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -60. This is not a topping or bottoming area. The last signal was a sell 10 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 1 period(s) ago.

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John Heffernan

John Heffernan is a Junior Analyst at HEFFX. John is studying Economics and is a contributor on equities at Live Trading News.

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