Allied International Trading says a slump in the price of iron ore and a potential slowdown in China has sent shares in mining giant Rio Tinto plunging.
Japan., March 13, 2014 - (PressReleasePoint) - According to Allied International Trading, the People’s Republic of China’s surprise fall in exports announced over the weekend has sent the price of iron ore tumbling causing a corresponding fall in the price of stock in mining behemoth, Rio Tinto.
China is one of the world’s biggest consumers of iron ore and much of Rio’s revenue is derived from its sales to China but the slump in the country’s exports by 18.1% for the month of February means that the company may face falling revenues.
Much of the recent revival in the fortunes of commodities can be traced to the export and infrastructure booms in Mainland China.
“Rio Tinto is also heavily involved in the production of copper and fears of slowing demand have exacerbated falls in the price of that metal as well,” said an Allied International Trading analyst.
Fears have been mounting for a slowdown in China as the country tries to take the heat out of an overheated property market and attempts to stimulate domestic demand to take up the slack caused by slowing growth in Europe, its largest trading partner.
“We believe that China will hit or at least get close to its projected growth rate of 7.5% this year but clearly there is some cause for concern when it announces an 18% slump in exports which have pretty much been the engine of its meteoric growth over the years,” said the Allied International Trading analyst.
Rio Tinto shares fell 5.7% while competitors, BHP Billiton and Glencore Xstrata fell4% and 3% respectively.
About Allied International Trading:
Established in 2010, Allied International Trading manages diversified investment portfolios on behalf of institutional clients, corporate entities and sophisticated high net worth individuals.
The Allied International Trading investment process is meticulous in its attention to detail, due to our highly disciplined approach of identifying and valuing great businesses, with unrealized investment potential.
To ensure we stay ahead of the market, after careful deliberation by our analysts, we impose a strict limit on the amount of companies we expose our clients to, taking their personal risk tolerance into account. Our objective is to build a diversified investment portfolio that will deliver superior returns for our array of different investors.