市场见解

Why has the Fortescue (ASX:FMG) share price had such a lousy start to December?

What’s caused the company’s shares to fall recently?
The post Why has the Fortescue (ASX:FMG) share price had such a lousy start to December? appeared first on The Motley Fool Australia. –

The Fortescue Metals Group Limited (ASX: FMG) share price had a disappointing run in the first few days of December.

Since the beginning of the month, the iron ore producer’s shares have tumbled by almost 5% in value. This puts the company as one of the weaker performers on the S&P/ASX 200 Index (ASX: XJO).

At Friday’s market close, Fortescue shares finished the day down a further 0.87% to $17.10.

What’s happened to Fortescue?

There are a number of reasons Fortescue shares have sunk in recent times.

The price of iron ore dropped after a mini bull run, reaching US$103.17 a tonne at the end of November. At current, the steel-making ingredient is trading at US$101.82, a fall of 1.63% for the first 5 days of this month.

Chinese lawmakers introduced new rules for its steel producers in an effort to curb reliance on Australian iron ore. Steel mills were instructed to limit 2021 output to no more than 2020 levels, or face harsh consequences.

As such, China wants its steel industry to halt iron ore production at around 1 billion tonne for 2021. This has led the price of iron ore to shrink from its lofty highs above the US$200 mark earlier this year.

Furthermore, Fortescue could suffer particularly more than its peers as it produces a lower grade of iron ore. Steel producers prefer higher quality iron ore, which miners 力拓集团 (ASX: RIO) and BHP Group Ltd (ASX: BHP) supply. Consequently, this puts a squeeze on Fortescue’s margins.

A number of brokers have weighed in on the Fortescue shares following the company’s September quarterly production report.

Goldman Sachs cut its price target by 3.5% to $11, while analysts at Credit Suisse reduced their rating by 33% to $14.

Based on the current Fortescue share price, this implies a downside of 35% and 18%, respectively.

About the Fortescue share price

Over the past 12 months, Fortescue shares have declined around 15% in value. However, when looking at year to date, its losses have declined by 30% for the period.

Fortescue commands a market capitalisation of roughly $53.11 million and has over 3 billion shares on its registry.

The post Why has the Fortescue (ASX:FMG) share price had such a lousy start to December? appeared first on The Motley Fool Australia.

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

Before you consider Fortescue Metals, 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 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

Top brokers name 3 ASX shares to sell next week

5 best ASX 200 resource shares to hold in November

The Fortescue (ASX:FMG) share price hit by broker downgrade

The Fortescue (ASX:FMG) share price jumped 22% in November

These were the 5 best performing ASX 200 shares in November

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.

随时随地,交易世界!

移动APP平台,拥有 12 个市场的 50,000 多种全球上市证券(全球市值超过 70%),直接在您的 Android 或 iOS 设备上即可操作。

与独有的交易理念和投资分析工具相结合,帮助您在我们 12 个全球市场中的几乎所有金融工具上找到可操作的见解,从而帮助您优化交易策略。

推荐给您的朋友

向您的朋友推荐Monex并赠予他们免费使用我们交易工具的机会

我们尊重您的隐私,只会向您的朋友发送一封邮件 

与您的朋友分享

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!