Fortescue Metals Shares Rally After Iron Ore Improves

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

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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

fortescue metals

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 is one of Money Morning’s junior analysts. 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. Ryan’s primary focus is assisting Sam Volkering with background research and insight for readers by dissecting the latest events affecting the world. Working closely with Sam, they explore the latest in small-cap and technology stocks as well as cryptocurrency opportunities. You can find Ryan’s contributing research, developments, and supporting information across several e-letters, including:


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