The Fortescue Metals Group Limited (ASX: FMG) share price has gained a stellar 72% year-to-date. That's enough to place it in the number 7 spot of top share price gainers on the S&P/ASX 200 Index (ASX: XJO) for 2020. By comparison, the ASX 200 is down 9.1% for the year.
Fortescue wasn't immune to the wider COVID-19 selloff gripping the markets earlier this year. The iron ore producer and explorer's share price dropped 23% from 21 February to 9 March. Since that low, the Fortescue share price is up an eye-popping 113%.
And this isn't a high-risk microcap miner hitting the motherlode we're talking about here. Fortescue is the fourth biggest iron ore producer in the world, with a market cap of $56.4 billion.
Fortescue's share price is on the rise again today, up 2.7% at the time of writing.
What does Fortescue do?
Fortescue is an iron ore production and exploration company. With core assets located in the Western Australia's Pilbara region, Fortescue first publicly listed in 1987. It now ranks as the fourth largest iron ore producer in the world.
The company owns and operates integrated operations spanning two iron ore mine hubs; the five-berth Herb Elliott Port and Judith Street Harbour towage facility in Port Hedland and the fastest heavy haul railway in the world.
Why Fortescue share price soared 72%?
Fortescue has been a clear winner from the rising iron ore prices this year, currently at US$120 per US ton. And while the iron ore prices are widely forecast to fall, that fall may not be quite so fast and hard as many analysts have predicted.
Bank of America, for one, recently upgraded its outlook for iron. On August 7, it lifted its forecast for 2020 to US$96.70 per tonne, up from US$86. It also raised its 2021 forecast from US$71.30 per tonne to US$85.
Meanwhile, one of Fortescue's top competitors, Brazil's Vale SA (NYSE: VALE) has seen its own iron ore production drop as mines struggled to cope with the pandemic in the nation. That supply drop came at a strategic time for Fortescue, as China – the world's most voracious consumer of iron ore – emerged from its own coronavirus hibernation.
With steel demand in China likely to remain strong as it turns to infrastructure and other construction projects to bolster its economy, Fortescue's share price could have further to run.
