Rio Tinto Plc ( RIO ) shares are trading lower premarket on Tuesday after the company reported the third-quarter fiscal 2025 trading update.

Iron Ore: Pilbara iron ore production remained flat year over year (Y/Y) at 84.1 million tonnes (Mt).

Pilbara iron ore shipments (consolidated basis) also remained stable Y/Y at 84.3Mt in the quarter. Notably, Pilbara achieved its second-highest third-quarter shipments since 2019.

Severe weather conditions impacted both production and shipment.

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Meanwhile, production of Bauxite rose 9% Y/Y to 16.4MT and Alumina rose 7% Y/Y to 1.9MT in the quarter.

Markets

Rio said that the global economy showed modest improvement in the third quarter, supported by favorable financial conditions, fiscal expansion in key economies, and advance investments ahead of anticipated tariffs. However, business and consumer sentiment weakened due to ongoing trade tensions.

In a statement about the Chinese economy, the company noted that it entered the third quarter facing challenges such as ongoing deflation, slowing manufacturing, decreasing exports, and a persistently weak property sector.

Despite these issues, the government is dedicated to achieving its annual growth target of 5%. To meet this goal, it is focusing on targeted stimulus measures in infrastructure and technology instead of implementing broad strategies.

The U.S. economy slowed in Q3 after a strong Q2, as GDP growth eased due to higher tariffs and a widening trade deficit impacting activity. While household spending remained resilient, business investment and consumer sentiment showed signs of weakening.

Outlook

For FY25, Rio now expects Pilbara shipments to be at the lower end of guidance of 323 to 338 Mt.

This is due to a 13 Mt loss resulting from cyclone impacts in the first quarter, with approximately half of that volume expected to be recovered.

The company revised guidance for Bauxite production to 59 to 61MT (from 57 to 59MT) on higher utilisation rates, mainly at Weipa.

The outlook for Alumina production remained unchanged at 7.4 to 7.8MT.

Chief Executive Simon Trott said, "We continue to strengthen performance from our assets, setting back-to-back quarterly production records in our bauxite business and at Oyu Tolgoi – where the underground ramp-up remains on track to boost copper output by more than 50% this year."

"We are focused on delivering a strong finish to the year from the Pilbara. Our growth projects are also progressing at pace – at Simandou, we started loading first ore at the mine for movement down the rail and to the port in October."

Investors can gain exposure to the stock via VanEck Steel ETF ( SLX ) and iShares Copper and Metals Mining ETF ( ICOP ) .

Price Action: RIO shares are down 2.41% at $66.52 premarket at the last check on Tuesday

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