The Fortescue Metals Group Limited (ASX: FMG) share price has been under pressure this past month. Shares in the Aussie iron miner have fallen more than 20% since 26 July amid a broader iron ore slump.
Why the Fortescue share price is down 20% in a month
Until this month, 2021 had been pretty good for iron ore prices. In fact, the key commodity price hit as high as US$229.50 per tonne on 12 May. There was a price slump through to late May before a recovery followed.
The Fortescue share price tracked iron ore prices lower throughout May and similarly recovered to $26.30 per share by late July.
However, iron ore prices have been plummeting since. From 16 July to 23 August, the value of iron ore has fallen from US$217.2 per tonne to US$132.6 per tonne. That’s a decline of 39% in the space of just 5 weeks.
The Fortescue share price hasn’t slumped quite as hard. Shares in the Aussie iron ore giant fell 24.4% over that same 5 week period and it wasn’t the only one.
Fellow iron ore producers BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO) also saw their values get hammered. BHP shares slumped 14.3% from 16 July to 23 August while the Rio Tinto share price fell 18.3% in the same period.
It means that despite a broadly positive earnings season, August has not been a good month for the Fortescue Metals share price.
The biggest factor, perhaps unsurprisingly, has been a crackdown from China. China is a major importer of iron ore but regulators are looking to keep a cap on steel production levels to reduce emissions.
That’s bad news for iron ore demand and comes amid a global infrastructure and property boom that has boosted demand.
The market has reacted accordingly, sending iron ore prices and the Fortescue Metals share price plummeting.