The Fortescue Metals Group Limited (ASX: FMG) share price has been on a disappointing run for the month of May.
In the past 30 days, the iron ore producer's shares have tumbled by more than 8% in value. This puts the company as one of the weaker performers on the S&P/ASX 200 Index (ASX: XJO).
For context, the ASX 200 benchmark index has fallen just 2% in May.
At Monday's market close, Fortescue shares recovered some lost ground to edge 1.33% higher to $19.85.
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What's happened to Fortescue's stock?
There are a couple of reasons that have likely contributed to the recent fall in the Fortescue share price.
The price of iron ore tumbled after a strong bull run from November last year.
At the time of writing, the steel-making ingredient is trading at US$133.17. This represents a fall of 7.57% when compared to the beginning of May.
It's worth noting that Fortescue could suffer particularly more than its peers as it produces a lower grade of iron ore.
Steel producers prefer higher quality iron ore, which miners Rio Tinto Limited (ASX: RIO) and BHP Group Ltd (ASX: BHP) supply.
Consequently, this puts a squeeze on Fortescue's margins.
A number of brokers also weighed in on the Fortescue share price in May following the company's March quarterly production report.
Bell Potter cut its outlook to sell from hold, and reduced its price target by 6.8% to $17.80 for Fortescue shares.
Analysts at Goldman Sachs had a more bearish sentiment, slashing its rating by 2% to $14.90.
Based on the current Fortescue share price, this implies a downside of 10% and 25%, respectively.
About the Fortescue share price
Over the past 12 months, Fortescue shares have declined by around 12%.
However, when looking at the year to date, they are up 3%.
Based on valuation grounds, Fortescue commands a market capitalisation of roughly $60.32 billion.
