Why did the Rio Tinto share price plunge 11% in June?

The Rio Tinto Limited (ASX: RIO) share price dived 11% last month despite the company keeping a relatively quiet profile.

In contrast, the S&P/ASX 200 Resources (ASX: XJR) sector also tracked a disappointing finish, down 12% in June.

Investors headed for the exits across the board following one of the most volatile months on the ASX since COVID-19.

Let’s take a look below at what happened to the mining giant’s shares over the course of June.

What happened to Rio Tinto shares last month?

The Rio Tinto share price headed south last month following weak investor sentiment amid selling pressure on iron ore prices.

External factors such as news surrounding China’s ploy to secure cheap iron ore through a domestic centralised buyer caused concern.

This led the steel marking ingredient price to deteriorate from US$145 to roughly US$130 at the end of June.

When the news broke out, Rio Tinto shares fell almost 10% from 15 June until 20 June.

In addition, investors feared that a global economic downturn sparked by monetary tightening from major central banks would dampen iron ore demand.

A couple of brokers weighed in on Rio Tinto shares following the turmoil across global markets.

As reported by ANZ Share Investing, RBC Capital Market cut its price target by 12% to $97 for the mining outfit’s shares.

Based on the current share price of $100.52, this represents a downside of about 3.5%.

On the other hand, Jefferies lifted its rating by 1.1% but still had a more bearish tone of $93 for Rio Tinto shares.

Rio Tinto share price snapshot

Since the beginning of 2022, the Rio Tinto share price has moved in circles to register nil gains for the period.

Although, when looking at the past 12 months, its shares are down 20%.

Rio Tino has a price-to-earnings (P/E) ratio of 5.68 and commands a market capitalisation of roughly $38.12 billion.

The post Why did the Rio Tinto share price plunge 11% in June? appeared first on The Motley Fool Australia.

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More reading

• ASX 200 midday update: Regis Resources jumps, BHP and Rio Tinto drop
• These ASX 200 mining shares are digging a deeper hole on Friday
• How have ASX 200 mining shares fared over June?
• Own Rio Tinto shares? Here’s how the company is ‘canning’ carbon emissions
• What was the highest Rio Tinto share price ever recorded?

Motley Fool contributor Aaron Teboneras 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 Scott Phillips.

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