RIO Tinto shares are down in London, as iron ore prices cap copper upside for the miner.
- Rio Tinto plc LON:RIO last traded at 7,014p, dropping 0.79% late in the London session as the FTSE 100 (INDEXFTSE:UKX) slipped 0.46%.
- Dalian iron ore ticked higher, though spot trade in China stayed light. SMM said shipments from Rio Tinto and Fortescue Ltd ASX:FMG were down last week.
- Visible Alpha consensus from Rio’s website puts FY27 underlying EBITDA just 2.7% higher than FY26, with the increase coming even as copper and Simandou forecasts are up.
- Rio Tinto’s next test comes with its half-year results on July 29.
Rio Tinto plc LON:RIO dropped in late London trade Monday, trailing the FTSE 100 (INDEXFTSE:UKX). The copper story hit a wall as iron ore weighed. Shares last at 7,014p, off 0.79%, with a bid-ask at 7,013p/7,015p. Market cap sat just under 114 billion pounds. London Stock Exchange trading ran 0800-1630 BST July 6.
Shares barely moved, but the split below the surface was more dramatic. TradingView put Rio down 14.3% for the past month. Still, it’s up 63.9% over the year. Investors are deciding how much of the copper story and Simandou upside is priced in.
Rio’s Visible Alpha consensus from May 18 lays out the pressure. Analysts see higher copper volumes and Simandou climbing in FY27, but overall group EBITDA is still seen growing only a little since iron ore isn’t forecast to add much.
| Rio Tinto consensus average | H1 FY26 | FY26 | FY27 |
|---|---|---|---|
| Analysts see underlying EBITDA at $14,885 million for H1 and $30,213 million for full-year 2026. FY27 up to $31,033 million. | 14,885 | 30,213 | 31,033 |
| Iron ore EBITDA including IOC is expected at $7,084 million for the first half, $14,620 million for FY26, then $14,291 million next year. | 7,084 | 14,620 | 14,291 |
| Simandou EBITDA seen slightly negative at -$2 million for H1, $119 million for the year, jumping to $941 million in FY27. | -2 | 119 | 941 |
| Copper EBITDA is $5,039 million for H1, $9,593 million FY26, $9,920 million for FY27 according to consensus. | 5,039 | 9,593 | 9,920 |
| Pilbara sales forecast at 156.5 Mt for the first half, 329.7 Mt on a year basis, then up to 336.1 Mt in FY27. | 156.5 | 329.7 | 336.1 |
| Analysts expect consolidated copper output at 444 kt for H1, 874 kt for the year, climbing to 924 kt for FY27. | 444 | 874 | 924 |
That’s the main concern for investors. Rio is pouring money into new copper and high-grade iron ore projects, but its profits still hinge mostly on iron ore from Pilbara. On consensus numbers, iron ore including IOC makes up around 46% of FY26 product-group EBITDA. Copper is about 31%.
China’s iron ore market lacked clear direction Monday. The Dalian 12609 contract ticked up 0.14% to 738 yuan a tonne. Port spot prices edged up 2-3 yuan, but SMM said steel mills only bought for immediate needs, with spot trade volumes staying thin. SMM also noted weaker shipments from Rio and Fortescue last week. The longer-term tone for iron ore is still bearish.
Copper edged up, though the move looked more like a longer-term bet than a Monday price bounce. Trading Economics quoted copper at around $6.15 a pound on July 6, off 0.35% for the day. The group’s forecast is $6.35 by quarter-end and $6.96 in 12 months. Rio’s consensus has copper at 524 cents a pound for FY26, 526 cents for FY27, with iron ore fines on a CFR basis easing from $101 a tonne to $96.
| Market or Rio assumption | Latest / FY26 | Forecast / FY27 |
|---|---|---|
| Dalian iron ore 12609 | 738 yuan/t, up 0.14% | SMM: steady for now, weaker outlook after |
| Copper CFD | $6.15/lb, off 0.35% | $6.35 by quarter close; $6.96 in a year |
| Rio iron ore fines CFR assumption | $101/t | $96/t |
| Rio copper assumption | 524 cents/lb | 526 cents/lb |
Oyu Tolgoi is still Rio’s main copper asset. On June 30, Rio Tinto said it reached a deal with the Mongolian government to adjust the shareholder loan interest rate for the project. The sides also plan to address the Entrée lease issues and earlier shareholder distributions. Katie Jackson, who runs Rio’s copper unit, said the new rate is set on a “forward-looking assessment” of Oyu Tolgoi’s risk. Rio still expects the mine to produce about 500,000 tonnes of copper a year between 2028 and 2036. Rio Tinto
Costs are still in focus. Rio maintained its 2026 Pilbara sales target of 323 million to 338 million tonnes after first-quarter Pilbara sales increased 2.4% to 72.4 million tonnes. CLSA’s Baden Moore told Reuters in April that “jet fuel and diesel shortages” are the top risk for the second half. Reuters
Consensus on dividends hasn’t moved much. Visible Alpha has total dividends at 490 U.S. cents a share for FY26 and 500 cents for FY27. Free cash flow is seen climbing from $7.79 billion to $10.0 billion, with net debt dropping from $13.1 billion to $10.6 billion.
Rio is set to report half-year results on July 29. For the market, it’s not just about volumes—traders are watching Pilbara costs, iron ore pricing, and how much Oyu Tolgoi can lift copper cash flow.
