ASX 200 iron ore shares are having a top run on the market on Wednesday.
Among those climbing higher in late afternoon trading are:
- BHP Group Ltd (ASX: BHP) shares, up 3.14%
- Fortescue Metals Group Ltd (ASX: FMG) shares, up 4.98%
- Rio Tinto Ltd (ASX: RIO) shares, up 3.2%
So what is going on with ASX 200 iron ore shares today?
What's happening?
BHP, Fortescue, and Rio Tinto are all major iron ore producers. BHP and Rio Tinto also produce other metals, including copper, gold, and aluminium.
Currently, iron ore for a July China future contract (62% Fe Fines) is up 0.39% to US$112.10 a tonne on the Singapore Exchange.
As well, China could be considering a stimulus package for its real estate sector, boosting sentiment for the commodity. Iron ore is used to make steel which is, in turn, is key to the building and construction industry.
Commenting on the iron ore price in an ANZ research note today, ANZ senior economist Adelaide Timbrell said:
The prospect of further support for the property sector saw iron ore futures rally. The measures are said to be focusing on lowering costs on outstanding residential mortgages and boosting relending through the nation's policy banks to ensure homes are delivered.
Iron ore lifted 2.52% overnight, while copper jumped 1.8% to US$8,460 a tonne. Timbrell added: "Copper led the base metals higher after China cut its short-term policy interest rate."
Broader market sentiment could also be helping ASX 200 iron ore shares today. News the US could be pausing rates amid a marginal 0.1% lift in the US consumer price index (CPI) may be giving the mining sector a boost. The S&P/ASX 200 Materials Index (ASX: XMJ) is up 2.58% so far today. Of course, lower interest rates make borrowing cheaper.
Checking the outlook for ASX 200 iron ore shares, analysts at Goldman Sachs have recently recommended investors buy both BHP and Rio Tinto shares. Goldman has a conviction buy rating and $130.70 price target on Rio Tinto.
Goldman Sachs analysts said:
With the sector trading at a discount, we see this current period as a particularly compelling buying opportunity for the major miners such as RIO (Buy, CL), BHP & S32.AX (both Buys).
Global mining and diversified metals company South32 Ltd (ASX: S32) is another mining share Goldman is recommending investors consider buying.
Share price snapshot
The Rio Tinto share price has climbed 4.8% in the last year. BHP shares have jumped 3.3% in the past 12 months while Fortescue shares have surged 11% in the last year.
