Fortescue Ltd (ASX: FMG) shares are trading at $20.18 on Thursday, up 1.3% amid the iron ore price holding above US$100 per tonne.
Last week, ASX 200 mining shares ripped amid one of the strongest rallies for the materials sector in many months.
The rally followed a strengthening of commodity prices, particularly iron ore and gold.
The iron ore price has sat above US$100 per tonne for 10 days, closing at US$102 per tonne overnight.
The gold price is US$3,367 at the time of writing, up 0.3% today.
Earlier this week, Trading Economics analysts described "fresh signs of robust demand [for iron ore] from China".
The analysts said China's iron ore imports in July climbed 2% from a year ago, well above the average monthly volume this year.
Restocking by Chinese steel mills, supported by healthy profits and relatively low inventories, continues to underpin the iron ore price.
What's happening with the Fortescue share price?
Fortescue shares have risen by 19.5% over the past four weeks.
The ASX 200 pure-play iron ore share is recovering from a persistent pullback in value between February and April.
Now, it's heading toward its 52-week high share price of $21.59, which was set on 30 September 2024.
The recent recovery has prompted some experts to slap a sell rating on Fortescue shares.
They argue that today's share price might provide an opportunity to harvest some short-term profits.
Others reckon new investors should buy in, and existing Fortescue investors should stay the course or buy even more shares.
The Bull presented opposing views from two experts on this ASX 200 blue-chip mining share this week.
Bull case for Fortescue shares
Jed Richards of Shaw and Partners has a buy rating on Fortescue shares.
He argues:
Fortescue continues to benefit from resilient iron ore prices, driven by Chinese infrastructure and demand for dam construction.
The company has posted record export volumes and maintains a low cost production advantage.
FMG is also investing in green energy and carbon reduction initiatives, aligning with global sustainable trends.
The strong dividend yield and disciplined capital management make it a compelling buy, in my view.
Richards has a positive outlook on the iron ore price.
I have pushed iron ore investment aggressively during the past six months, while many other analysts have been more pessimistic.
With iron ore recently trading around $US100 a tonne, Fortescue offers income and growth potential.
Bear case for this ASX 200 iron ore stock
Harrison Massey from Argonaut has a sell rating on Fortescue shares.
Massey said Fortescue's June quarter report revealed record total iron ore shipments of 55.2 million tonnes.
This contributed to record total shipments of 198.4 million tonnes in FY25, up 4% on the prior corresponding period.
Massey commented:
Despite the stronger-than-expected June quarter, we're still relatively downbeat on the outlook for iron ore spot prices, thereby creating significant short term headwinds.
Massey noted the significant lift in Fortescue shares since mid-June when the stock was trading in the mid-$14 range.
What about Fortescue dividends?
One of the reasons Fortescue shares are popular with investors is the company's generous dividends over recent years.
But this may be about to change.
We recently revealed the Commsec consensus forecasts for dividend payments from the ASX 200 bank and mining shares in 2026.
Analysts on the Commsec platform have a consensus prediction that Fortescue shares will pay 77.8 cents in dividends in 2026.
Those dividends would come with full franking credits.
Based on today's Fortescue share price, this represents a dividend yield of 3.9%. With franking added, that's a gross yield of 5.5%.
The average dividend yield for the broader ASX 200 has fallen from its long-run average of 4% to 4.5% down to 3.34% today.
Betashares investment strategist, Cameron Gleeson, says this is largely due to weaker dividends from the banks and miners.
What's next for Fortescue shares?
According to our earnings season calendar, Fortescue will release its full-year FY25 results on Monday, 25 August.
