The Fortescue Metals Group Limited (ASX: FMG) share price is making a comeback this week, bouncing 13% off Monday's low of $14.15.
At the time of writing, the Fortescue share price is up 4.1% to $16.00.
Iron ore back above US$100
Chinese markets were closed on Monday and Tuesday as the nation celebrated its Mid-Autumn Festival.
According to Fastmarkets, iron ore prices rose sharply on Wednesday amid a strong post-holiday push on front-month swaps and futures.
Benchmark iron ore prices rallied 16% to US$108.70 a tonne.
Fortescue share price bouncing off 14-month lows
Fortescue shares were in a dire place on Monday, opening at a 14-month low of $14.15.
Iron ore has plunged more than 60% from record highs of US$230 a tonne to US$92.98 a tonne on Monday.
The price is under pressure due to China capping its steel output and rolling out energy-consumption curbs.
The market has also been very concerned about the debt-laden Chinese property giant, Evergrande, so there's been no shortage of bearish headlines for iron ore.
The S&P/ASX 200 Index (ASX: XJO) has rallied strongly since Wednesday afternoon when Evergrande announced it had reached an agreement to meet its bond coupon payment.
The Fortescue share price rallied strongly off the news, pushing 4.2% higher yesterday to close at $15.37.
Iron ore outlook remains weak
Analysts warn that China's iron ore demand will remain weak as the country focuses on lowering energy consumption and its property market slows.
Despite the small win this week, the Fortescue share price may continue to suffer as a result of weak iron ore prices.
UBS strategist Wayne Gordon said iron ore will come under more pressure and fall to US$80 to US$90 a tonne heading into next year, according to Mining.com.
Australia & New Zealand Banking Group Ltd (ASX: ANZ) analyst Daniel Hynes was also pessimistic about the recent rally above US$100 a tonne.
Hynes said:
This is probably the last hurrah in terms of that fundamental growth in steel demand. There is no relief on production cut pressure, as the government is asking more provinces around Beijing to cut their steel production to improve air quality ahead of the Winter Olympics next year.
