Fortescue Metals Ltd [ASX:FMG] climbed 3.2% this morning to $4.95 per share.
So what happened to the Fortescue Metal Share Price?
Helping FMG was iron ore prices. As you may know, the price of iron ore has a tremendous influence on FMG’s profit margin. The higher the price of iron ore, the better for FMG.
But as you also may know, the price of iron ore has been one of the most volatile commodities this year. Prices raced above $94 a tonne in February, only to fall to $60 a tonne in May.
According to Metal Bulletin, the price of iron has stabilised in the past few days. As reported by Business Insider Australia:
‘..the spot price for benchmark 62% fines rose by 0.61% to $61.17 per tonne, continuing the modest price movements seen in recent days.
‘Indeed, the benchmark price has fallen, risen, fallen, risen, fallen and risen over the past six sessions, trading in a range of just $1.23.’
Looking to the future for Fortescue Metals Ltd?
Will the price of iron ore finally stay put? I doubt it. While iron ore miners would want nothing more than for prices to race up to $90 and stay there, it’s very unlikely due to the activity in the Chinese steel industry.
While iron ore miners are depressed, who’s to say the commodity won’t drop even further? Nobody can predict the bottom. And many have lost money trying. Instead, why not focus on commodities experiencing a constant stream of demand?
It’s something resource analyst Jason Stevenson can help you with. A number of Jason’s active investments in his advisory service, Resource Speculator, are up 52.4%, 57.6% and 100%!
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Junior Analyst, Money Morning