Fortescue share price sinks 5% as iron ore price slides

Fortescue shares can't seem to catch a break lately.

| More on:
Upset man in hard hat puts hand over face after Armada Metals share price sinks

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Fortescue shares closed almost 5% lower today after a week of trading heavily in the red
  • Shares in the ASX miner are sliding alongside the falling price of iron ore
  • China's latest move to set up a centralised iron ore buyer within the country may also be impacting the resources market

The Fortescue Metals Group Limited (ASX: FMG) share price has come under selling pressure from investors today.

This is despite the iron ore mining outfit not releasing any price-sensitive announcements to the ASX.

The company's shares closed down 4.69% at $18.71 on Friday after plunging to a three-month low of $18.61 earlier in the day.

It's worth noting that since this time last Friday, Fortescue shares have tumbled around 13% alongside broader market volatility.

About the iron ore price

After hitting a three-week low of US$131.50, the current price of iron ore is a likely factor weighing down the Fortescue share price today.

The other ASX mining giants were also negatively impacted, with BHP Group Ltd (ASX: BHP) shares shedding 3.98% to close at $42.26 on Friday. The Rio Tinto Ltd (ASX: RIO) share price dropped 4.68% lower to $106.47 apiece at the close.

And looking at the sector-wide performance, the S&P/ASX 200 Resources Index (ASX: XJR) closed 2.63% lower to 5,515.2 points.

China's latest moves

News surrounding China's latest ploy to secure cheap iron ore through a domestic centralised buyer may also be causing concern among investors.

As reported by the Financial Times, the Xi Government is seeking to consolidate the country's iron ore imports through a new entity.

This would lead to an increase in pricing power over the global iron ore industry from Beijing, as well as reduced reliance on Australian exports.

However, some experts are sceptical about Beijing's ability to enforce such measures on small operators to join the project.

China is the world's largest consumer of iron ore, with 1 billion tonnes needed to feed its insatiable steel industry.

Currently, the Asian powerhouse takes in about 70% of the world's iron ore, provided mainly by Australia.

Fortescue share price snapshot

Fortescue shareholders have been on a rollercoaster ride over the past 12 months.

The company's shares hit a 52-week high of $26.58 last July as iron ore prices accelerated above US$220 a tonne.

However, this was short-lived, with the price of the steel-making ingredient quickly retracing in the following months until November 2021.

The Fortescue share price is down 16% from this time last year.

Based on today's price, the company commands a market capitalisation of approximately $61.21 billion.

Motley Fool contributor Aaron Teboneras 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 Scott Phillips.

More on Resources Shares

a sad looking engineer or miner wearing a high visibility jacket and a hard hat stands alone with his head bowed and hand to his forehead as he speaks on a mobile telephone out front of what appears to be an on site work shed.
Resources Shares

Down 14% in 2024, why is the BHP share price sliding again today?

ASX 200 investors are bidding down the BHP share price on Wednesday.

Read more »

A mining employee in a white hard hat cheers with fists pumped as the Hot Chili share price rises higher today
Resources Shares

These ASX 200 mining stocks could rise 40% to 50%

Analysts think these miners are dirt cheap at current levels.

Read more »

Image from either construction, mining or the oil industry of a friendly worker.
Resources Shares

Fortescue share price leaps 5% as electric machinery makes a milestone

Fortescue is charging ahead with its electric mining ambitions.

Read more »

rising mining asx share price represented by happy woman miner in hard hat
Resources Shares

Why the BHP share price crushed the benchmark this week

BHP shareholders enjoyed a rewarding week.

Read more »

A man wearing a hard hat and high visibility vest looks out over a vast plain where heavy mining equipment can be seen in the background.
Dividend Investing

Here is the profit forecast to 2026 for BHP shares

Let’s unearth how much profit this miner could make.

Read more »

Female miner standing next to a haul truck in a large mining operation.
Resources Shares

Is the worst of the selling now over for ASX iron ore shares?

ASX iron ore giants like BHP, Rio Tinto and Fortescue rebounded this week after falling hard in 2024.

Read more »

Three satisfied miners with their arms crossed looking at the camera proudly
Resources Shares

Why are ASX 200 mining shares smashing the benchmark on Wednesday?

Rio Tinto, BHP and Fortescue shares are all charging higher today.

Read more »

Two miners standing together.
Resources Shares

Why is the South32 share price getting battered today?

ASX 200 investors are bidding down South32 shares today.

Read more »