The Fortescue Metals Group Limited (ASX: FMG) share price is climbing today after a choppy week for iron ore miners.
At the time of writing, the Fortescue share price is 1.68% higher at $14.56.
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Mixed signals for China's steel industry
China's energy restrictions for industrial use, which weighed on the steel industry in late September, have been easing in some areas in October. This has allowed steel mills to gradually resume production since the beginning of the month, mill sources and traders told S&P Global Platts.
Despite the potential good news for iron ore markets and subsequently Fortescue shares, sources in the regions said most steelmakers were not expected to ramp-up to full capacity to ensure 2021 crude steel output remains near 2020 levels.
Traders also told S&P Global construction steel demand in September and October turned out to be weaker than expected. Any signs of recovery in the fourth quarter were expected to be limited by a slowdown in the property sector.
Some flat steel traders went as far as saying demand from the manufacturing sector has been battered by a double whammy of power rationing and surging commodity prices.
Iron ore prices are also sending mixed signals for the Fortescue share price.
Spot prices edged higher overnight on Thursday with prices up US$1.74 or 1.4% to US$125.91 a tonne.
Prices rose slightly amid active trading activity in the spot market and at Chinese ports, sources told Fastmarkets.
China's most active futures contracts for January 2022 delivery on the Dalian Commodity Exchange are currently trading 0.8% lower at approximately 725 yuan (US$112.7) a tonne.
Fortescue shares find support at $14
The Fortescue share price is down 41% year-to-date and sitting around 15-month lows. It is also down around 12% over the past 12 months.
Its free-fall has stabilised in recent weeks, consolidating around the mid $14 level.
