Fortescue (ASX:FMG) share price up 3% as iron ore prices edge higher

Fortescue shares edge higher amidst higher iron ore prices.

| More on:
Oil worker drilling on the oil field

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Fortescue Metals Group Limited (ASX: FMG) share price is bouncing higher on the last trading session of the September quarter.

At the time of writing, shares in the iron ore major are trading 3.21% higher to $15.28 after a volatile week for the broader equity markets.

Iron ore markets are showing mixed results, with spot prices running higher despite weak manufacturing output in China.

Fortescue share price lifts amid higher iron ore prices

Iron ore prices inched up on Wednesday as Chinese steel mills continued to restock inventories ahead of its week-long national holiday.

According to Fastmarkets, iron ore prices added 1.84% to US$114.13 a tonne but it's still lower than what it was fetching at the beginning of the week, at US$119.31 a tonne.

Another piece of good news for the Fortescue share price is the performance of Chinese iron ore futures traded on the Dalian Commodity Exchange.

The most active futures contracts for January 2022 delivery surged 7.15% this morning to around 732 yuan (US$111) a tonne.

Slowing iron ore demand in China

Chinese iron ore demand remains constrained as the country handles a major energy crisis which has halted production across major industrial hubs.

Beyond production woes, the country is experiencing a shift in the raw materials used for steel.

According to S&P Global, China continues to see an uptrend in steel scrap consumption, which requires much less energy than smelting iron ore for steel products.

The National Development and Reform Commission sees China's 2025 steel scrap usage rising to 320 million mt on carbon neutrality goal, its latest data showed. China used 260 million mt steel scrap back in 2020, replacing 410 million mt 62% iron ore.

This trend adds to the mounting challenges for iron ore as China continues to focus on emissions targets and lowering steel outputs.

Despite trading 2.16% higher today, the Fortescue share price remains in negative territory week-on-week, down 1.37%.

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Resources Shares

a sad looking engineer or miner wearing a high visibility jacket and a hard hat stands alone with his head bowed and hand to his forehead as he speaks on a mobile telephone out front of what appears to be an on site work shed.
Resources Shares

Down 14% in 2024, why is the BHP share price sliding again today?

ASX 200 investors are bidding down the BHP share price on Wednesday.

Read more »

A mining employee in a white hard hat cheers with fists pumped as the Hot Chili share price rises higher today
Resources Shares

These ASX 200 mining stocks could rise 40% to 50%

Analysts think these miners are dirt cheap at current levels.

Read more »

Image from either construction, mining or the oil industry of a friendly worker.
Resources Shares

Fortescue share price leaps 5% as electric machinery makes a milestone

Fortescue is charging ahead with its electric mining ambitions.

Read more »

rising mining asx share price represented by happy woman miner in hard hat
Resources Shares

Why the BHP share price crushed the benchmark this week

BHP shareholders enjoyed a rewarding week.

Read more »

A man wearing a hard hat and high visibility vest looks out over a vast plain where heavy mining equipment can be seen in the background.
Dividend Investing

Here is the profit forecast to 2026 for BHP shares

Let’s unearth how much profit this miner could make.

Read more »

Female miner standing next to a haul truck in a large mining operation.
Resources Shares

Is the worst of the selling now over for ASX iron ore shares?

ASX iron ore giants like BHP, Rio Tinto and Fortescue rebounded this week after falling hard in 2024.

Read more »

Three satisfied miners with their arms crossed looking at the camera proudly
Resources Shares

Why are ASX 200 mining shares smashing the benchmark on Wednesday?

Rio Tinto, BHP and Fortescue shares are all charging higher today.

Read more »

Two miners standing together.
Resources Shares

Why is the South32 share price getting battered today?

ASX 200 investors are bidding down South32 shares today.

Read more »