Iron ore rockets another 7%: 5 miners to watch this week

Shares in Fortescue Metals Group Limited (ASX:FMG), Rio Tinto Limited (ASX:RIO), and BHP Billiton Limited (ASX:BHP) could all leap again today.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Iron ore has risen 7% to US$79/tonne overnight according to The Metal Bulletin. The last time prices were this high was June 2015. Iron ore is now up 16% in the past three sessions, propelling shares of Fortescue Metals Group Limited (ASX: FMG), Rio Tinto Limited (ASX: RIO), and BHP Billiton Limited (ASX: BHP) up 18%, 11%, and 12% respectively in the past five days.

At today's prices, equivalent to just over A$100 per tonne, the biggest miners – with their low costs – are virtually printing cash and Fortescue Metals in particular will be making serious headway into its shrinking pile of debt.

Shares in smaller miners like BC Iron Limited (ASX: BCI) and Atlas Iron Limited (ASX: AGO) have absolutely skyrocketed, up 34% and 69% in the past five days, as higher iron ore prices  (if they persist) could see them turning something resembling a profit.

Additionally, investors will want to make sure they do their research into turnaround stories like this, since recent times haven't been kind to the balance sheets or the shares on issue for junior miners.

The recent surge in iron ore has been matched by a rise in coal prices, lighting a fire under Whitehaven Coal Ltd's (ASX: WHC) share price – up 241% this year.

Some of the infrastructure projects touted by the recently elected Mr Trump could drive higher demand for iron ore, steel, and coal in the near term, as could the Chinese government's own infrastructure projects.

Rapidly rising share prices at the major miners is exciting, as will be the higher profits and dividends when they come through. Yet investors need to do their research to evaluate whether much of the upside is already priced into a company – as well as whether current prices are likely to improve or deteriorate in the next 2-3 years. Failing to do the legwork could see you buying into the excitement and getting burned later on.

Motley Fool contributor Sean O'Neill has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »