What’s dragging on the Fortescue share price today?

Fortescue’s shares have dropped into the red today…

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The Fortescue Metals Group Limited (ASX: FMG) share price is having a disappointing day.

In afternoon trade, the mining giant’s shares are down 3% to $17.83.

Why is the Fortescue share price falling?

There are a couple of potential catalysts for the weakness in the Fortescue share price today.

The first is a pullback in iron ore prices. According to Reuters, Dalian and Singapore iron ore futures fell on Thursday amid demand worries in China for the steel-making ingredient.

After four straight sessions of gains, the price of iron ore for September delivery fell 2.7% on China’s Dalian Commodity Exchange. This puts it on track to record a quarterly loss of approximately 11%.

Anything else?

Also potentially weighing on the Fortescue share price are comments out of Commonwealth Bank of Australia (ASX: CBA).

The banking giant’s commodities team has warned that commodity prices could fall materially by the end of 2023 as demand softens.

Vivek Dhar, CBA’s mining and energy analyst, courtesy of the AFR, said:

The key risk to the ongoing rise in energy and mining commodity prices is demand destruction. High food prices and rising interest rates to combat inflation will also drag on end-user demand, further reducing the likelihood that mining and energy commodity prices will continue to rise.

Should this happen, then the big dividends that Fortescue has been paying in recent times could come under threat.

Motley Fool contributor James Mickleboro 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.

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