Numerous iron ore miners exist around the world, with four major players: BHP Group Ltd (ASX: BHP), Rio Tinto Ltd (ASX: RIO), Fortescue Ltd (ASX: FMG), and Brazilian miner Vale.

In this environment of declining commodity prices, you'd think miners would be cautious with their production volumes to prevent the iron ore price from falling. But one of the major miners has just revealed a concerning update.

Vale increases production guidance

The Brazilian miner increased its estimated iron ore production volume for 2024 to a range of 323mt to 330mt, an increase from the previous guidance of 310mt to 320mt. The midpoint of its 2024 annual production guidance has been increased by more than 3%.

Vale also announced that it has started commissioning wet processing operations in the Vargem Grande 1 Project. This project can resume approximately 15mt per annum of iron ore production at the Vargem Grande complex in Minas Gerais.

The miner said Vargem Grande 1 was completed within budget, and commissioning started one month ahead of schedule.

Vale noted this project represents an "important step" towards the iron ore production guidance of between 340mt to 360mt in 2026, resulting in an "improvement of the product portfolio quality, greater production capacity and greater operational flexibility."

Vale is suggesting its iron ore production, at the mid-point of guidance, could increase by another 7% by 2026.

Why is this bad news for ASX iron ore shares?

The iron ore price has already dropped to the low US$90s, and this is significantly hurting the ongoing profitability of the miners.

Mining costs don't typically change much month to month, so a rise in the iron ore price for revenue largely adds to net profit as well. But, the reverse is true when the iron ore price declines – the drop in revenue largely comes off the net profit, too.

Profit pays for the dividend payments and investors usually value a business based on its profit. That's why, since the start of 2024, the BHP share price has dropped 22%, the Rio Tinto share price has fallen 21%, and the Fortescue share price has dropped 44%.

Supply and demand are very important factors in the iron ore price. And Chinese demand is paramount because China is the biggest global buyer of the commodity.

Unless Chinese demand picks up, Vale's increasing supply could put more pressure on the iron ore price. We may not have seen the bottom of this iron ore decline yet.

The post Why the iron ore price could have further to fall appeared first on The Motley Fool Australia.

Fortescue shares are down 3.41% and are currently fetching $20.40 apiece. For perspective, the S&P/ASX 200 (ASX: XJO) is climbing 0.59% today.

Let's take a look at what is going on with Fortescue today.

Iron ore prices slip

Fortescue is not the only ASX iron ore share in the red today. The BHP Group Ltd (ASX: BHP) share price is slipping 0.75%, while Rio Tinto Ltd (ASX: RIO) shares are descending 1.01%.

Additionally, the S&P/ASX 200 Materials Index (ASX: XMJ) is the market's worst-performing sector today, currently down 0.68%.

Fortescue is a major iron ore producer. The iron ore price fell by nearly 2% to US$110.25 overnight.

The share price of global iron ore giant Vale SA (NYSE: VALE) slipped 4.19% on the New York Stock Exchange and is continuing to drop 0.37% in after-hours trade.

ANZ economist Madeline Dunk said the iron ore price fell after "data showed the property sector remains under duress". In a research note, she said:

Falling demand for homes has seen prices decline for 14 consecutive months. Market conditions also remain weak, with property funding and activity very subdued.

Fortescue shipped 47.5 million tonnes of iron ore in the first quarter of FY23, 4% higher than the prior corresponding quarter.

The company announced in late November that Fiona Hick will join the company in February as the new CEO of the metals group.

Fortescue share price snapshot

The Fortescue share price has climbed 11% in the last year.

Fortescue has a market capitalisation of about $63.2 billion based on the latest share price.

The post Why is the Fortescue share price tanking on Tuesday? appeared first on The Motley Fool Australia.