ASX 200 iron ore shares are going gangbusters today. Here's why

BHP, Rio Tinto, and Fortescue shares are all surging higher on Friday.

| More on:
A female employee in a hard hat and overalls with high visibility stripes sits at the wheel of a large mining vehicle with mining equipment in the background.

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

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.

Motley Fool contributor Bernd Struben 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

Three satisfied miners with their arms crossed looking at the camera proudly
Dividend Investing

3 top ASX 200 mining shares for bank-busting dividend income in 2024

All three ASX 200 mining shares pay fully franked dividends.

Read more »

Miner looking at a tablet.
Resources Shares

What can ASX 200 investors expect from the Rio Tinto share price in 2024?

Atop a big boost in the Rio Tinto share price over the past 12 months, the ASX 200 miner also…

Read more »

Two miners standing together.
Resources Shares

Could Donald Trump really sink the Fortescue share price?

Fortescue founder Andrew Forrest is making some big bets on green hydrogen.

Read more »

Three miners looking at a tablet.

2 ASX mining ETFs to buy in December

Lithium and uranium exposure is a doddle with these ETFs.

Read more »

A young boy sits on top of a big rubber bouncing ball with handles as he smiles a toothless grin at the camera and bounces above the ground in a grassy field with a blue sky.
Dividend Investing

Here's why the dividends from BHP shares could rebound in 2024

The full-year BHP dividend slumped 43% in FY 2023, but passive income investors could see an uptick in FY 2024.

Read more »

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

Lithium, copper and gold stocks: Will they GO OFF IN 2024?

Bell Direct's Grady Wulff analyses the three hottest commodities to determine what their fortunes could be like next year.

Read more »

Three miners wearing hard hats and high vis vests take a break on site at a mine as the Fortescue share price drops in FY22
Resources Shares

Why these 3 ASX 200 mining shares leapt into The Motley Fool's news this week

From iron ore to copper to green hydrogen, there was plenty of excitement amongst the ASX 200 miners this week.

Read more »

Two people smiling at each other while running.
Resources Shares

2 ASX 'not mining' shares I think are overdue for a big rally

The cyclical nature of resources stocks is not everyone's cup of tea. But here's a pair of investments that could…

Read more »