Insights

Fortescue (ASX:FMG) share price down 5% as iron ore retreats

Fortescue shares are down again, following a pullback in iron ore prices.
The post Fortescue (ASX:FMG) share price down 5% as iron ore retreats appeared first on The Motley Fool Australia. –

Fortescue Metals Group Limited (ASX: FMG) shares were selling off sharply on Wednesday. The Fortescue share price closed the day down 5.34% to $14.

Iron ore prices pull back

Iron ore spot prices retreated on Tuesday, amid limited trading at Chinese ports, sources told Fastmarkets.

For instance, benchmark iron ore prices fell US$6.03 or 4.5% to US$129 a tonne.

Chinese iron ore futures on the Dalian Commodity Exchange also tumbled on Wednesday.

The most active futures contracts for January 2022 delivery is currently down 4.5% to 740 yuan (US$114) a tonne.

What’s next for iron ore?

Australia and New Zealand Banking Group senior commodity strategist Daniel Hynes expects Chinese steel demand to continue to flatline towards the end of the year, according to Bloomberg.

“China’s plans to have a flat steel production growth this year look possible, as output curbs have been accelerated by power shortfalls.”

Hynes said that China, the world’s largest construction and manufacturing material producer, will have to contract 10% in annual terms between September and December to meet its decarbonisation goals.

On the other hand, Commonwealth Bank of Australia commodities analyst Vivek Dhar wrote that “steel output is reportedly set to increase in October in some parts of China, like Tangshan, Jiangsu, Zhejiang and Anhui, after these regions exceeded steel production cuts in September.”

Weak steel output could continue into 2022, ahead of Beijing’s Winter Olympic Games in February.

This is because, in the past, authorities have shut down a number of industrial activities near the capital to keep the sky as blue as possible.

Fortescue share price snapshot

Fortescue’s year-to-date return continues to linger around the negative 40% level.

The sharp selling between early August and late September appears to have largely subsided. This is as the Fortescue share price consolidates around the $14 level.

Despite Fortescue shares finding a footing around $14, many experts point to lower iron ore prices in 2022. One such expert is the Australian government’s commodity forecaster, the Office of the Chief Economist (OCE).

The OCE forecasts iron ore to average around US$150 a tonne in 2021. Further, it predicts this will fall to below US$100 a tonne in 2022.

The post Fortescue (ASX:FMG) share price down 5% as iron ore retreats appeared first on The Motley Fool Australia.

Should you invest $1,000 in Fortescue Metals Group right now?

Before you consider Fortescue Metals Group, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Fortescue Metals Group wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Why Bank of Queensland, Fortescue, Liontown, & Pact shares are dropping

Here’s why ASX hydrogen shares are leaping higher today

Why did the Fortescue (ASX:FMG) share price have such a lousy FY22 first quarter?
Leading brokers name 3 ASX shares to buy today

What this leading broker is saying about the Fortescue (ASX:FMG) share price

Motley Fool contributor Kerry Sun 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.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!