The Fortescue Ltd (ASX: FMG) share price has been among the worst performers within the S&P/ASX 200 Index (ASX: XJO) in 2024 to date, falling by close to 35%. However, it's possible the ASX mining share could experience a rebound in 2025 and beyond.
The iron ore price is an important driver of the ASX 200, considering the size of mining companies like Fortescue, BHP Group Ltd (ASX: BHP), and Rio Tinto Ltd (ASX: RIO). A strengthening iron ore price could significantly lift the Fortescue share price and the ASX 200 as a whole.
Commodity prices are difficult to predict, particularly for iron ore, which relies heavily on Chinese demand.
However, one expert thinks the outlook is positive for iron ore and, therefore, Fortescue shares.
The ASX 200 has already seen a positive performance recently due to investor excitement regarding the incoming new administration in the United States, and there could be more gains to come.
According to reporting by the Australian Financial Review, MST Marquee analyst Hasan Tevfik said:
The very near-term outlook for equity markets is a positive one as investors price in the aspiration of a new administration in the US at the same time interest rates continue to come down.
Is the outlook positive for Fortescue shares?
Tevfik believes the ASX share market will be boosted by signs of improving conditions in China's steel market.
The AFR reported that the iron ore price in Singapore rose 1.3% to US$104.40 per tonne on Friday. This price action has reportedly been fuelled by speculation that China may need to spend more on financial stimulus to help offset tariffs put on Chinese goods by incoming US president Donald Trump.
Another positive, according to the AFR, is that there is evidence conditions in China's steel market are easing. A survey from Mysteel showed that more than half of steel mills are now profitable after a fall in profit margins earlier in 2024.
In other reports, data from the Asian superpower revealed that Chinese factory activity continued to expand last month, and it was stronger than expected.
While Fortescue shares still face a challenged outlook, MST thinks Chinese stimulus measures "will be enough to support commodity prices as the supply of raw materials remains tight." Tevfik said:
Our expectation of further stimulus in China keeps us positive on the Aussie commodity producers.
Fortescue share price snapshot
While 2024 has been difficult for the ASX mining share, the company has seen its share price rise by close to 8% since 20 November. The ASX 200 has only climbed 1.4% over the same time period.
