Today Rio Tinto’s share price saw a strong day in trading, up by 2.04% this afternoon at $92.84 per share.
This rapid increase is Rio Tinto Ltd‘s [ASX:RIO] highest share value since the middle of the GFC — and mining boom — of the late 2000s.
What caused Rio Tinto share price to rise?
Brazilian mining group Vale suffered a collapse of its dam wall in recent weeks, which results in a supply drop of 40 million tonnes. Commodities analysts are now suggesting that the iron price could cross the US$100 per tonne mark.
Mid-year reporting season is still on its way, and there definitely could be more room to grow for all the mining giants. Sentiment seems high on the main.
But it’s important to remember the nature of the mining sector. Its cyclical nature means that mining stocks can often be vulnerable to economic downturn, political volatility and other external factors.
What’s next for Rio Tinto?
At the moment, iron prices have risen to levels unseen since 2014. And the past few weeks suggest that this is a very positive start to the year for Australia’s titan miners.
But things can change quickly and often fast. The Chinese economic slowdown could certainly put a spanner in the works at some stage in the year.
Can the good times continue for Rio Tinto?
Only time will tell. But judging from the broader successes sweeping over the mining sector at large, it seems likely that some great possibility lies ahead.
For Money Morning