Up 5% at time of writing, Fortescue Metals Group Ltd [ASX:FMG] has reacted well to improved iron ore prices.
Fortescue had earlier been under the pump as iron ore prices slumped.
Under the Pump
As seen below, from a high of $4.98 on 14 May 2018, Fortescue fell to $3.53 on 12 September 2018.
This 29% drop happened as the US and China butted heads over tariffs.
Recently, the price of iron ore has been improving, surging to a six month high as shown below.
Iron Ore Surges
Speculation that the Chinese policymakers will pump money into their domestic market has driven this surge.
This would be a return to the policies which saw China achieve impressive growth until now.
Today, Fortescue has profited from this speculation.
At time of writing, it has shown a 13% change over the past week.
Given its recent hard to explain downturn, this is a welcome boost for the embattled miner.
PS: 2018 Mining Boom: Could these 10 cheap, top-quality Aussie mining stocks lead this year’s commodities comeback? Find out here.