The Fortescue Metals Group Ltd (ASX: FMG) share price is catching a bid on Tuesday, despite iron ore prices falling below US$100 a tonne for the first time in 14 months.
Fastmarkets reported that its benchmark iron ore prices fell $8.97 a tonne or 8.8% to US$92.98 a tonne. This means that iron ore prices have tumbled 58% in a matter of months, from May record highs of US$230 a tonne.
At the time of writing, the Fortescue share price is trading 1.77% higher to $14.96.
Why iron ore prices keep on falling
Iron ore prices have cratered following weak Chinese demand and the country's focus on energy consumption and emissions targets.
Yesterday, Mining.com reported China continues to crack down on its industrial activity, citing "steel mills in Jiangsu province have received instructions to reduce production as part of broader curbs on industrial activity aimed at lowering power usage".
"The cuts are concentrated between now and October 15 and are focused on construction steel."
To add further pressure, China's second-largest property developer Evergrande has taken the spotlight this week following concerns that it may default on its US$300 billion debt burden.
The headlines drove a sharp downturn for US markets overnight, with the Dow Jones Industrial Average, S&P 500 and Nasdaq sliding 1.78%, 1.70% and 2.19% respectively.
Evergrande's potential collapse could spell trouble for China's all-important real estate and construction sectors.
In terms of its relevance to iron ore, China's property and infrastructure sectors account for 55% of its steel consumption, according to S&P Global.
Fortescue share price bounces off 14-month lows
The Fortescue share price is trading higher on Tuesday. Earlier, it was up 2.31% to $15.05.
Shares in the iron ore major managed to bounce strongly on Monday after sliding as much as 7.33% on open.
Fortescue managed to close Monday's session 3.73% lower with 29.57 million shares trading hands, compared to its 10-day average of 15.6 million.
That said, it's still down 36% year-to-date and down 7.2% over the last 12 months.
