The Fortescue (ASX:FMG) share price is down 13% so far this month

The miner’s shares have fallen off a cliff since July highs.
The post The Fortescue (ASX:FMG) share price is down 13% so far this month appeared first on The Motley Fool Australia. –

The Fortescue Metals Group Limited (ASX: FMG) share price has been on a continuing decline since late July.

Shares in the world’s fourth-largest iron ore miner have come under pressure amid the plunging spot price for the steel-making ingredient.

At Friday’s market close, Fortescue shares ended the day at $18.27. This means that its shares are now down 13% for this month alone.

More on the iron ore spot price

After touching a record high of US$219.77 per tonne in July, the iron ore spot price fell off a cliff. Chinese policymakers laid down the rules for its steel producers in an effort to curb reliance on Australian iron ore.

Chinese mills were instructed to limit 2021 output to no more than 2020 levels, or face harsh consequences.

As such, the current iron ore price has dropped to US$133.82, a descent of almost 7% in September. But how will this affect the Fortescue share price?

What does this mean for Fortescue?

The sharp decrease will no doubt have an impact on Fortescue’s bottom line; however, profits are still expected to be churned out.

In its full-year results released last month, Fortescue reported its highest-ever annual shipments of 182.2 million tonne of iron ore. Coupled with its industry-leading C1 costs of US$13.93 per wet metric tonne, this still translates to bumper profits.

The company is forecasting to maintain iron ore shipments for FY22, with a guidance of 180 million to 185 million tonne.

C1 costs are expected to rise slightly to US$15-US$15.50 per wet metric tonne (based on assumed average exchange rate of AUD:USD 0.75).

Only time will tell if Fortescue can achieve the above guidance, despite its strong dependence on the Chinese market. If it does miss the mark however, its shares could tumble further.

Fortescue share price summary

It has been a rollercoaster ride for Fortescue investors, with its shares reaching all-time highs before sinking to near 52-week lows.

Over the last 12 months, the company’s share price has moved just 2% higher, with year-to-date down more than 20%.

Fortescue has a market capitalisation of around $56.2 billion and approximately 3 billion shares on its books.

The post The Fortescue (ASX:FMG) share price is down 13% so far this month 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

How have ASX resources shares performed during the August 2021 earnings season?

These were the worst performing ASX 200 (ASX:XJO) shares last week

These ASX 200 dividend shares are about to dish out $40bn to shareholders

Could falling iron ore prices be good for the Fortescue (ASX:FMG) share price?
Top brokers name 3 ASX dividend shares to buy today

Motley Fool contributor Aaron Teboneras 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!