RBC Downgrades Rio Tinto to Underperform, Forecasts Iron Ore Falling to $85/Ton
Alina Collins
RBC cut Rio Tinto to underperform, forecasting iron ore at $85/ton by end-2027 — this means Rio's biggest profit engine is slowing, and the stock looks expensive with no clear catalyst ahead.
Why is RBC turning bearish on Rio now?
Rio's shares have rallied roughly 8% since the Middle East conflict began. RBC sees that gain as already priced in.
This means → the stock moved, but fundamentals didn't follow — valuation is stretched and there is no fresh upside trigger.
On the day of the downgrade, Rio fell 3.2%. The market clearly agreed.
How far could iron ore fall?
RBC forecasts iron ore will grind lower, reaching $85/ton by end-2027.
In plain terms = unless a major supply disruption hits — a mine accident, a port shutdown — iron ore has no reason to hold current levels.
China's macro backdrop remains under pressure, and elevated energy prices limit the scope for large-scale stimulus — both demand and policy are constrained at the same time.
What cards does Rio still hold?
The market has partly priced in Rio's expected sale of borate and mineral-sands assets, plus some potential infrastructure deals.
Rio is still hunting for copper acquisitions, aiming to pivot from iron ore dependence toward copper — the key metal of the energy transition.
This reflects a dilemma: copper is the right direction, but acquisition multiples are high right now — overpaying would drag down returns.
Who does RBC prefer among the diversified miners?
RBC's top pick is Glencore, rated outperform.
This means → Glencore benefits from rising thermal coal prices and upward revisions to marketing EBIT — near-term profit visibility is stronger.
BHP and Vale are both rated sector perform — not bad, but lacking the marginal improvement RBC sees in Glencore.
Content is for reference only, not financial advice.