Rio Tinto (LON: RIO) share price has come under pressure in the past few months as most of its key metals have struggled. The stock, one of the most important ones in the FTSE 100, has dropped to 4,919p, down by over 13% from its highest point this year. This means that it has moved into a correction.
Rio Tinto is one of the biggest mining companies in the world. Like other top players in the industry, the company does well when these commodities are rising.
Recently, however, most metals that it mines have dropped sharply amid rising concerns about the Chinese economy.
The price of iron ore has plunged and is now approaching the $100 mark. This is happening because of the strong inventories in China and the fact that many factories are slashing their orders.
The performance of iron ore is a sign that China’s economy is not doing well as the housing sector goes through a turmoil. Banks and local governments are also going through a significant strain.
