The Fortescue Metals Group Ltd (ASX: FMG) share price has managed a small gain on Monday amid higher iron ore prices.
At the time of writing, the Fortescue share price is trading 1.29% higher to $14.495.
Iron ore prices edge higher
Iron ore spot prices ticked US$2.59, or 2.2%, higher to US$119.52 a tonne overnight on Friday, according to Fastmarkets.
Similarly, iron ore futures opened firmer on China’s Dalian Commodity Exchange Monday, with contracts for January 2022 delivery currently 4.06% higher to around 705 yuan (US$105) a tonne.
After falling more than 50% from May all-time highs of US$230 a tonne, iron ore prices have stabilised around the US$120 a tonne level.
This has also seen the Fortescue share price find its footing in recent weeks, finding plenty of buying support when it hits the low or sub $14.00 level.
Commodity drivers fading
In a note to clients, Fitch said that the supply-side and global macro factors driving a synchronised commodity price boom are now beginning to wane.
“China’s property market is cooling, the pace of global industrial production growth is slowing, the US dollar has started to strengthen and global US dollar credit flows are weakening,” said Robert Sierra, Director in Fitch Ratings’ Economics Team.
Fitch pointed out that China’s slowing property market has already slashed iron ore prices against a backdrop of rapidly decelerating global industrial production.
Fitch added that monetary conditions are likely to tighten as the US Federal Reserve is on the cusp of withdrawing some of its pandemic support, tapering its US$120 billion in monthly purchases of Treasury bonds and mortgage-backed securities.
Fortescue share price snapshot
The Fortescue share price is down 38% year-to-date to a 16-month low.
It’s been largely range-bound since late September, finding plenty of buying support around $14 but its rallies towards $15 have been short-lived.