Atlas Iron Limited share price plunges 14%

One of the worst performers on the local market today has been the Atlas Iron Limited (ASX: AGO) share price.

In afternoon trade the iron ore producer’s shares are down 14% to 1.8 cents.

What happened?

Prior to today Atlas Iron’s shares had gained 40% in just one month thanks to the iron ore price storming higher.

But with warnings coming out of China that current iron ore and steel prices are unsustainable, it appears as though traders are taking profit on investments in Atlas Iron and iron ore peer Fortescue Metals Group Limited (ASX: FMG).

The shares of Fortescue Metals have also fallen sharply today and are down 4% to $5.52 at the time of writing.

The iron ore price for 62% fines last closed at US$76.68 a tonne according to Metal Bulletin. This is a rise of over 40% in just two months.

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Motley Fool contributor Motley Fool Staff 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.

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