The Rio Tinto share price declined slightly after the company released its first quarter production results that were mostly in line with what analysts were expecting. The firm also left its guidance unchanged but warned that there was a possibility that iron ore demand will be weak. The RIO share price is trading at 6,084p, which is 7% below its highest level this year.
Rio Tinto results: In a report, published this week, Rio Tinto said that its iron ore shipments from Pilbara rose by 7% in the first quarter. Bauxite production fell by 2% because of weather concerns in Eastern Australia while aluminium production rose by 3% in the first quarter. Its copper production declined by 9% in the quarter while Titanium dioxide fell by 5%. The management said:
“We achieved an overall solid operating performance in the first quarter. We have maintained guidance ranges in all our products, with site teams successfully managing the effects of significant rainfall, in particular at our Australian iron ore assets.”
Rio Tinto share price also declined slightly after the company’s head of copper business in Mongolia was questioned about payments the company made to a number of people. Some of the people mentioned, including, Byambasaikhan Bayanjargal have already been sent to prison for corrupton charges.
On the daily chart, we see that the Rio Tinto share price has been rebounding after it fell to 5,261 on March 25. The price has jumped by more than 15% since then. It has also moved above the 25-day and 15-day moving averages. Also, the price is between the ascending black channel while the Relative Strength Index (RSI) has risen close to the overbought level of 70.
Therefore, in my view, the recovery will continue as bulls target the upper side of the channel at above 6,500p. This is further supported by the bullish inverted head and shoulders pattern. However, a drop below 5,550p will invalidate this trend.
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