Shares in the Aussie iron ore miner are under pressure this month.
The post August hasn’t been a great month for the Fortescue (ASX:FMG) share price appeared first on The Motley Fool Australia. –
The Fortescue Metals Group Limited (ASX: FMG) share price has been under pressure this past month. Shares in the Aussie iron miner have fallen more than 20% since 26 July amid a broader iron ore slump.
Why the Fortescue share price is down 20% in a month
Until this month, 2021 had been pretty good for iron ore prices. In fact, the key commodity price hit as high as US$229.50 per tonne on 12 May. There was a price slump through to late May before a recovery followed.
The Fortescue share price tracked iron ore prices lower throughout May and similarly recovered to $26.30 per share by late July.
However, iron ore prices have been plummeting since. From 16 July to 23 August, the value of iron ore has fallen from US$217.2 per tonne to US$132.6 per tonne. That’s a decline of 39% in the space of just 5 weeks.
The Fortescue share price hasn’t slumped quite as hard. Shares in the Aussie iron ore giant fell 24.4% over that same 5 week period and it wasn’t the only one.
Fellow iron ore producers BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO) also saw their values get hammered. BHP shares slumped 14.3% from 16 July to 23 August while the Rio Tinto share price fell 18.3% in the same period.
It means that despite a broadly positive earnings season, August has not been a good month for the Fortescue Metals share price.
The biggest factor, perhaps unsurprisingly, has been a crackdown from China. China is a major importer of iron ore but regulators are looking to keep a cap on steel production levels to reduce emissions.
That’s bad news for iron ore demand and comes amid a global infrastructure and property boom that has boosted demand.
The market has reacted accordingly, sending iron ore prices and the Fortescue Metals share price plummeting.
The post August hasn’t been a great month for the Fortescue (ASX:FMG) share price appeared first on The Motley Fool Australia.
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Motley Fool contributor Ken Hall 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 Bruce Jackson.