The Fortescue Metals Group Ltd (ASX: FMG) share price is threatening a new year-to-date low on Friday, down 0.14% to $14.00.
We take a look at what could be weighing on the iron ore giant's shares today.
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Iron ore prices tumble
Iron ore prices tumbled US$7.21 or 6.02% on Thursday night to US$112.65 a tonne. Sources told Fastmarkets that prices fell after stricter emissions restrictions were introduced in China's steelmaking hub of Tangshan.
Chinese iron ore futures on the Dalian Commodity Exchange fell on open on Friday, with the most actively traded contracts for delivery in January 2022 sliding 3.9% to around 650 yuan (US$101) a tonne.
China intervenes in commodity markets
In further news possibly affecting the Fortescue share price, Chinese policymakers have beefed up measures to take the heat out of surging commodity prices.
According to Reuters, thermal coal prices plunged 10% after the state planner asked major coal-producing provinces to probe and regulate illegal storage sites and crack down on hoarding behaviours.
Looking over at steel and iron ore demand, analysts with CITIC Securities said: "Affected by energy consumption controls, environmental curbs during winter heating season and the Winter Olympics… steel supply is expected to be restricted continuously, iron ore demand will be dented in the long term."
Fortescue share price snapshot
The Fortescue share price hit a 12-month low of $13.91 on October 7 but has since been hovering around the low $14 level. Its recent rallies to above $15 have also been short-lived, followed by snap selloffs back to $14.
On one hand, China's slowing economic growth could serve as a potential tailwind for iron ore prices. Earlier this month, the world's second-largest economy flagged a 4.9% year-on-year increase in third-quarter GDP, the slowest since a year ago.
On the contrary, the Fortescue share price might appear 'cheap' given its 43.5% year-to-date decline and coming off the back of a record year of earnings.
Fortescue shares are down 15.8% over the past 12 months.
