The Fortescue Metals Group Ltd (ASX: FMG) share price is stalling on Monday following fresh Chinese economic data and soft iron ore prices.
At the time of writing, the Fortescue share price is up 0.51% to $14.675.
Iron ore prices retreat amid weak demand
Iron ore spot prices retreated overnight last Friday, down 69 cents or 0.55% to US$125.22 a tonne.
According to Fastmarkets, seaborne iron ore prices fell amid lower traded volumes at Chinese ports.
In the futures market, China’s most active futures contracts for January 2022 delivered on the Dalian Commodity Exchange tanked on open this morning, sliding as much as 6% to ~684 yuan (US$106) a tonne.
Bouncing off morning lows, Chinese futures are currently down 1.2% to around 720 yuan (US$112) a tonne.
China GDP growth hits 1 year low
Another factor that might be weighing on the Fortescue share price is a major slowdown in China’s economic growth.
The world’s second-largest economy reported a 4.9% year-on-year increase in third-quarter GDP, the weakest pace since the third quarter of 2020.
This marked a major slowdown from the 7.9% growth in the second quarter and 18.3% in the first quarter.
The third quarter faced several headwinds including the Evergrande debt crisis and broader property slump, an energy crisis, supply bottlenecks, and surging raw material prices.
Perhaps more relevant for the Fortescue share price, factory output, investment in construction and other fixed assets all weakened.
Industrial production increased 3.1% in September but well below the 4.5% expected by Reuters.
China’s construction sector has been weighed down by tightening credit rules and weak consumer sentiment towards the overall property sector. According to Reuters, China’s September new construction starts fell for a sixth straight month, the longest consecutive decline since 2015.
Fixed asset investment growth came in at 7.3% compared to a year ago, but missed the 7.9% figure from its national bureau.
Fortescue share price lingers around $14
The Fortescue share price is down around 40% year-to-date, spending the past month drifting around the $14 level.
On one hand, iron ore prices have bounced strongly off of recent lows of US$90 a tonne.
However, a slowdown in the all-important Chinese economy and looming Evergrande debt concerns could also put the brakes on the Fortescue comeback story.