2021 has been a year of sideways movement for the Fortescue Metals Group Ltd (ASX: FMG) share price.
Shares in the iron ore major hit record all-time highs of $26.40 on 8 January but tumbled to lows of $18.87 by 22 March.
In the last week, there appears to be a resurgence in confidence for iron ore miners and the broader resources sector, with the Fortescue share price staging an 8.63% rally to close at $25.18 on Tuesday.
Fortescue share price eyeing previous record highs
The Fortescue share price is less than 5% away from its January all-time record high of $26.40.
Encouragingly, Fortescue isn’t alone in its attempt to break out to new highs.
The BHP Group Ltd (ASX: BHP) share price has rallied 4.86% in the last week to $50.70. It’s also not far off its 11 May all-time high of $51.82.
Similarly, the Rio Tinto Ltd (ASX: RIO) share price is up 3.52% in the last week to $128.36. It needs another 2.84% to reach its 10 May record all-time high of $132.94.
What’s the go with iron ore prices?
Iron ore prices continue to defy bearish expectations, holding above the US$200 level.
According to Market Index, the spot iron ore price is currently sitting at US$217.33 a tonne.
The Australian government’s commodity forecaster, Office of the Chief Economist (OCE), said that “prices are forecast to average around US$150 a tonne in 2021, before falling to below US$100 a tonne by the end of 2022, as Brazilian supply recovers and Chinese steel production softens”.
The last time iron ore was fetching US$100 a tonne was around early June 2020.
Back then, the Fortescue share price was trading around $14.
What’s next for the Fortescue share price?
Goldman Sachs has slapped a sell rating on Fortescue shares with a 12-month target price of $18.20.
The broker believes that Fortescue’s rally might be coming to an end and vulnerable to falling iron ore prices.