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.
Source: marketindex.com.au
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
Source: tradingview.com
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.
Fortescue Responds
Source: tradingview.com
Given its recent hard to explain downturn, this is a welcome boost for the embattled miner.
Regards,
Ryan Clarkson-Ledward
PS: 2018 Mining Boom: Could these 10 cheap, top-quality Aussie mining stocks lead this year’s commodities comeback? Find out here.
Ryan Clarkson-Ledward
Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.
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