Why are ASX 200 resources shares booming again on Friday?

The price of iron ore has rebounded and ASX 200 resource shares are reaping the benefits

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It’s a good day on the ASX to be a resource investor. The S&P/ASX 200 Resources Index (ASX: XJR) is booming, having gained 2.3% at the time of writing.

For context the S&P/ASX 200 Index (ASX: XJO) is up as well, having increased by 0.93%. Meanwhile, the All Ordinaries Index (ASX: XAO) is also up 0.93%.

Let’s take a look at what’s excited the market over ASX 200 resources shares on Friday.

What’s boosting the sector on Friday?

There are a few interlinking happenings that are likely favourably impacting the ASX’s resource sector.

Firstly – and, perhaps, most importantly – the price of iron ore rebounded overnight.

According to CommSec, while most of Australia slept, the spot price of iron ore surged 5.3% to US$94.20 a tonne.

The resurgence in the steelmaking commodity’s price was due to Chinese developer, China Evergrande Group (HKG: 3333).

The now-infamous developer reportedly managed to stay afloat by making interest payments on 3 bond tranches worth US$148 million.

As The Motley Fool has previously reported, the Evergrande saga has likely spurred concerns about the future of Chinese property developers.

Unsurprisingly, the nation’s building industry is a big consumer of steel, thus, demanding plenty of iron ore.

Which ASX 200 resource shares are soaring?

The biggest mover among the ASX 200 resources sector by far is Gold Road Resources Ltd (ASX: GOR). Its share price has gained 5.3% so far this Friday.

Taking out second and third place is Champion Iron Ltd (ASX: CIA) and Rio Tinto Limited (ASX: RIO), having both gained 3.8% at the time of writing.

Rio Tinto’s fellow iron ore giants are also performing well.

The BHP Group Ltd (ASX: BHP) share price has gained 3%. Meanwhile, that of Fortescue Metals Group Limited (ASX: FMG) is up 3.6%.

However, there are a few sector participants in the red today. Notable fallers include Whitehaven Coal Ltd (ASX: WHC). Its share price is currently down 0.6%.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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