The fortunes of ASX shares of iron ore producers very much correlate to the prospects for the global economy.
Although western economies are looking pretty sick (or at least uncertain) at the moment, China's post-COVID reopening since late last year has many experts thinking demand could soar for iron ore.
One keen-eyed investor noted that last week the Chinese Communist Party set, by its historical standards, a modest 5% economic growth target for this year.
He, therefore, wondered whether iron ore miners are still attractive to buy at the moment.
Shaw and Partners portfolio manager James Gerrish set out to answer this conundrum:
Not hitting the panic button yet
The short answer is that Gerrish's team would still buy into iron ore producers.
"The economic news flow hasn't been kind over the last week, but we aren't hitting the panic buttons yet!" Gerrish said in a Market Matters Q&A.
However, he would look to buy them at the best short-term price.
"We still like iron ore miners into dips," he said.
"BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO), for example, are still trading well above last week's low even after trading ex-dividend 90c and $3.26 fully franked."
The wild volatility in the current market should not detract from the long-term bullishness, he added.
Since Gerrish made those comments, BHP, Rio Tinto and Fortescue Metals Group Limited (ASX: FMG) shares have all fallen, to perhaps open up a buying opportunity.
Goldman Sachs is rating Rio Tinto shares as a buy, predicting a juicy 5.35% and 6.9% dividend yield in each of the coming two financial years.
"Goldman Sachs has a buy rating and price target of $131.70 on the miner's shares," reported The Motley Fool's James Mickleboro.
"This is due to their 'compelling valuation' and the company's 'return to production growth in 2023.'"
The Rio Tinto share price is up 7.6% over the past 12 months.
BHP, which is 3.3% lower than where it was a year ago, is currently rated as a buy by just seven out of 25 analysts surveyed on CMC Markets.
But that's not as bad as Fortescue, which is currently recommended as a sell by 13 out of 17 analysts.
The Fortescue share price is now actually 21% higher than it was a year ago.
