The Rio Tinto share price is headed for another steep drop this Friday as commodity stocks start to feel the jitters from the renewed lockdowns in Shanghai, China. The Rio Tinto share price is down 1.49% as of writing, extending Thursday’s 2.72% slide. This comes as the FTSE 100 endures a huge selloff, with many listed companies all trading lower.
Sentiment soured on commodity stocks as authorities in China resumed the lockdown of Shanghai barely two weeks after a two-month lockdown of the city was lifted. The new lockdowns aim to mass test millions of residents in pursuance of the Chinese government’s zero-COVID-policy. Analysts fear that the focus of the lockdown could shift from one of identifying cases to one of more stringent containment of entire districts. Shanghai is China’s number one heavy industrial city, and an extended lockdown reduces commodity demand, putting pressure on metal stocks like Rio Tinto.
The Rio Tinto share price is also facing headwinds from a lawsuit from Russian aluminium company Rusal in an attempt to regain its 20% stake in the Queensland Alumina refinery. Rio Tinto took full control of the refinery, previously under joint ownership with Rusal, following the Russian invasion of Ukraine. Rusal says that Rio Tinto’s takeover of Rusal’s 20% stake in the company violated its ownership rights as its stake in the alumina refinery did not constitute a sanctions violation.
Rio Tinto Share Price Outlook
The active daily candle is set for a test of the 5799 support level (8 March low and 29 April high). A breakdown of this area targets 5615 (9 March low). Additional targets to the south are seen at the 5410 and 5283 price marks.
On the flip side, a bounce on the 5799 support must be strong enough to take out the 6073 resistance, forming a new higher high in the process. This allows the price action to resume the uptrend, targeting 6211 (4 March and 8 April highs). A further advance opens the door toward 6349 (3 March 2022 high), leaving 6552 as an additional northbound target.