Iron Ore Falls 1.62% as China Import Surge Meets Weak Steel

ASX 200 mining shares outperformed last week. Morgans rated BHP (ASX: BHP) a buy, citing strong performance and copper exposure, with FY26 profit up 9% to $9.8B. Rio Tinto (ASX: RIO) received a hold rating due to iron ore exposure. PLS Group (ASX: PLS) was rated sell, with in-line earnings and a maiden dividend.

Australian shares are expected to rise 0.2% at open after a 1% drop due to rate hike concerns. Tech stocks fell, with Xero, WiseTech, and NEXTDC declining. Qantas rose 4.8% on revenue growth forecasts. US markets gained, led by Nvidia's 8.7% surge. European markets fell 0.8%.

The FTSE 100 remained flat as falling crude prices hurt oil majors Shell and BP, each down over 1.5%. Gains in homebuilders and miners offset some losses. A UK housing program supported domestic equities, while Brent crude fell to $86/barrel. Industrial metals rallied, benefiting miners like Rio Tinto and Anglo American.

Rio Tinto faces a deadline to secure a new power deal for its Bell Bay Aluminium smelter in Tasmania. The current deal expires at year-end, and failure to renew may risk closure. Hydro Tasmania and Rio Tinto are negotiating, with a $60M price gap. Local leaders urge government action to secure the smelter's future, citing its economic importance.

The Australian government has agreed to a AUD$2.5 billion bailout to save the Tomago aluminium smelter, majority-owned by Rio Tinto, ensuring its transition to renewable energy by 2033. The deal includes a 10-year below-market power supply guarantee and AUD$1.1 billion investment by Tomago Aluminium. The smelter produces 40% of Australia's annual aluminium.

UBS reports diversified miners are focusing on copper expansion for higher valuations. The bank rates Anglo American (£46 target) and Teck Resources (C$105 target) as buys, citing portfolio restructuring and earnings beats. Freeport-McMoRan (NYSE:FCX, $77 target) is also a buy due to Grasberg mine recovery. BHP, Rio Tinto, and Glencore are rated neutral with respective targets of £29.50, £73, and 570 pence. Shares of these companies showed mixed movements in afternoon trading.