S&P/ASX 200 Index (ASX: XJO) iron ore shares are absolutely smashing it on Friday.
The big three iron ore miners are enjoying a number of global tailwinds today, including growing consensus that global central banks are at – or near – the end of the current tightening cycle.
But the miners look to be getting the biggest lift from another overnight increase in the iron ore price.
Defying bearish forecasts from leading analysts, iron ore has been steadily climbing higher over the past month.
The industrial metal gained another 1.6% overnight to be trading for US$121.30 per tonne. That's up from recent lows of US$99 per tonne on 25 May. And it's up 49% since 1 November when the iron ore price dipped to US$81 per tonne.
Here's how these ASX 200 iron ore shares are tracking during the lunch hour on Friday:
- BHP Group Ltd (ASX: BHP) shares are up 4.2% at $45.97
- Rio Tinto Ltd (ASX: RIO) shares are up 3.9% at $119.99
- Fortescue Metals Group Ltd (ASX: FMG) shares are up 4.6% at $21.34
So, what's happening in the global markets?
ASX 200 iron ore shares and China
Concerns over China's slowing economy and ailing steel-hungry property markets drove down the iron ore price from mid-March through to mid-May.
China not only counts as the world's second-biggest economy, it's also the largest importer of iron ore.
But over the past weeks, renewed optimism on Chinese government stimulus is helping lift the iron ore price, and ASX 200 iron ore shares, once more. The industrial metal also looks to be getting a boost from low inventory levels, temporarily shifting the supply and demand dynamics.
Investor sentiment got another lift yesterday when the People's Bank of China (PBoC) cut the reserve requirement ratio for most Chinese banks by 0.25%. This is the central bank's second cut this year in an effort to kick-start China's slowing economy.
ASX 200 iron ore shares BHP and Rio Tinto also trade in US markets.
Yesterday, overnight Aussie time, the BHP share price closed up 4% on the New York Stock Exchange (NYSE).
The Rio Tinto share price gained even more, finishing the day up 4.6% on the NYSE.