Rio Tinto (ASX: RIO) is a diversified mining company producing iron ore, aluminium, copper and other critical minerals globally. Rio Tinto’s key commodity exposures, supported by new policy signals from the Chinese government, drove the company’s strong performance in September. Major Chinese state-run iron ore procurer, China Mineral Resources Group, blocked iron ore purchases from competitor BHP Group (ASX: BHP), positively impacting Rio Tinto’s iron ore pricing environment. The company also benefits from stronger relations with China given their joint venture in Simandou, which is significant given the volume of global iron ore demand influenced by Chinese policy decisions. The well-established pattern of supply chain interruptions in the industrial metals sector supported both aluminium and copper prices, offering further upside for Rio Tinto during the month. Given the company’s share price effectively assumes an iron ore price well below the current market price, we continue to see value in Rio Tinto, particularly over competitors in the sector.
CSL (ASX: CSL) is a global biotechnology company developing plasma therapies, vaccines and treatments for rare diseases. The company saw further fallout in September after its FY2025 results were announced well below expectations in August, and the market continued to grapple with the company’s lower longer term growth prospects for its Behring franchise, and the probable spin-out of the Seqirus division. Adding to this, the healthcare sector more broadly has been under pressure, with the market favouring more cyclical exposures. We believe the current share price accurately reflects the risks and opportunities the company is facing, and without any new information coming to light in the months ahead, we are yet to find the conviction to build a larger position in CSL.
