The Fortescue Metals Group Limited (ASX: FMG) share price continued its impressive run on Tuesday with another solid gain.
The low cost iron ore producer's shares climbed a further 3% today to hit a new decade-high of $8.23.
This latest gain means that Fortescue's shares have now rallied an incredible 98% since the start of the year, making it the second-best performer on the ASX 200 just behind Afterpay Touch Group Ltd (ASX: APT).
Why is the Fortescue share price up 98% in 2019?
Investors have been fighting to get hold of the shares of Fortescue and fellow miners BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO) this year after iron ore prices surged higher due to supply disruptions in both Australia and Brazil.
Iron ore prices continued to increase on Monday night, leading to the benchmark 62% fines hitting a multi-year high.
According to Metal Bulletin, the price of the 62% fines rose 2.6% to US$95.60 a tonne during overnight trade.
The price of the low grade 58% fines iron ore, which Fortescue produces, also climbed higher, rising 3.1% to US$79.21 a tonne. This took low grade iron ore to a five-year high and narrowed the discount between it and the benchmark fines to 17%.
This is quite a turnaround for low grade iron ore. In August Fortescue advised that it expected its lower grade iron ore to sell at a 35% discount to benchmark fines.
Is it too late to invest?
If iron ore prices continue to rise then I think Fortescue could still climb higher from here.
However, unless further supply disruptions occur in the coming months, I'm not overly convinced that prices will climb materially higher from here. For this reason I'm going to keep my powder dry and wait for a better entry point.
