The Fortescue Metals Group Limited (ASX: FMG) share price was well and truly out of form in September.
The iron ore producer's shares were the worst performers on the ASX 200 during the month with a decline of 28.8%.
This means the Fortescue share price is now down 40% since the start of 2021.
Why did the Fortescue share price lose 29% of its value in September?
There were a few catalysts for the weakness in the Fortescue share price last month.
Chief among them was the sharp pullback in iron ore prices. This was driven by supply concerns after China curbed steel production and Chinese property giant Evergrande teetered on the edge of defaulting on its huge debts.
And with steel producers having a preference for higher grade ore, there are fears that discounts will widen for the lower grade iron ore that Fortescue produces.
It was partly for this reason that a number of brokers downgraded the company's shares in September, putting additional pressure on its share price.
One of those brokers is Morgan Stanley. It has put an underweight rating and lowly $12.50 price target on the company's shares. This implies further downside of 16.5%.
What else weighed on its shares?
Also weighing heavily on the Fortescue share price last month was its massive final dividend for FY 2021.
On September 6, Fortescue's shares traded ex-dividend for the fully franked $2.11 final dividend.
Based on its share price at the start of the month, this dividend alone accounts for approximately 10% of its decline during September.
All in all, September was a month to forget for Fortescue shareholders. They will no doubt be hoping for better in October. Time will tell if that's the case.
