Lower production by Brazilian miner Vale in 2022 is likely to be supportive of iron ore producers, according to Morgan Stanley. The company indicated low-grade supply will be held back in order to not oversupply the market.

Separately, management of Rio Tinto have pointed to ongoing inflationary pressures, as the labour market in Western Australia is tight and other input costs, such as energy, continue at elevated levels.

Morgan Stanley retains an Equal-weight rating, $101 target and In-Line industry view.

Sector: Materials.

Target price is $101.00.Current Price is $93.50. Difference: $7.50 - (brackets indicate current price is over target). If RIO meets the Morgan Stanley target it will return approximately 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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