The Fortescue Ltd (ASX: FMG) share price has recently been a strong performer in the S&P/ASX 200 Index (ASX: XJO). In-fact, it has delivered one of the strongest gains among the major ASX blue-chip shares.
As the above chart shows, in the last 12 months the Fortescue share price has gone up by approximately 40%. That compares to a rise of around 4% for the ASX 200. Both of those figures are at the time of writing.
A $10,000 investment a year ago would now be worth $14,000.
It's rare for a blue-chip to rise as much as that. So, we're going to take a look at what has driven the ASX mining share to deliver such a large return.
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Big increase in profitability
The market usually values a business based on how much net profit it's making and could generate for the foreseeable future.
Many businesses have fairly consistent business models that allow them to generally and steadily grow profit each year. I'm thinking of names like Wesfarmers Ltd (ASX: WES), Telstra Group Ltd (ASX: TLS) and Commonwealth Bank of Australia (ASX: CBA).
But, Fortescue's profit generation can change significantly because of shifts in the commodity price.
It has a certain level of production costs per tonne of iron ore, regardless of whether the iron ore price is US$80 per tonne or US$180 per tonne. Therefore, when the iron ore price rises, most of that additional revenue can turn into operating profit (EBITDA) and net profit (aside from paying more to the government).
So, a relatively small change in the commodity price can significantly boost its profitability, which we saw in the FY26 half-year result, which also boosts the Fortescue share price.
During HY26, the hematite (iron ore) realised price improved by 7% to US$90.87 per tonne and the volume of ore sold increased by 4% to 100.2mt. This led to a 10% rise in revenue to US$8.4 billion, a 23% rise in underlying EBITDA to US$4.5 billion, a 23% increase in attributable net profit to US$1.9 billion and a 32% rise in operating cash flow to US$3.2 billion.
According to Trading Economics, since 31 December 2025, the iron ore price per tonne has risen by another couple of dollars to US$109 per tonne.
Compared to 12 months ago, the iron ore price has gone up by approximately US$10 per tonne and I think that goes quite a long way to explain the gain of the Fortescue share price, along with the recovery of investor confidence following announced US tariffs on China in the first half of 2025.
Where to next for the Fortescue share price?
The next 12 months could largely depend on what happens with the iron ore price, though copper could play an increasingly important part if Fortescue continues expanding its copper project portfolio.
According to CMC Invest, of nine analyst ratings in the past three months, the average price target is $19.37. That implies a possible double-digit fall from where it is today, with in the next 12 months.
So, it seems there are better ASX share opportunities out there at the moment.
