At time of writing, there have been broad-based gains for blue chip stocks and the ASX 200 is up 39.2 points.
Iron ore spot prices are up again, close to a multi-year record on weather disruptions in China and Australia. The share prices of Fortescue Metals Group Ltd and Rio Tinto Ltd could benefit.
The major iron ore miners have had a good day today. The gains can be attributed to two events in two countries - China and Brazil.
Iron ore prices are up again as fresh news of further Brazilian production cuts filter through the market. Picking the overall trend here is tricky as each bit of news out of Brazil has shifted the market, despite the various factors internal to China.
Iron ore prices are up again as the steel price has risen and the market enters a traditional peak period. This means the iron ore rally could have a bit more juice in it yet.
With the iron ore price firming up after two weeks of falling prices, Fortescue Metals has reaped the benefits today. Iron ore prices have experienced a renaissance following a dam disaster in Brazil.
At the time of writing, f Fortescue Metals Group's share price is down by 4.54% for the day, to $6.65 per share. Over the last few weeks, Fortescue Metals Group’s share price skyrocketed following the Brumadinho dam burst in Brazil ― the country’s worst mine disaster on record.
Following a significant surge in the price of iron ore after a Brazilian dam collapse, the price of iron ore has cooled slightly. Much of this comes down to declining steel mill margins.
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.
Iron ore miner Fortescue Metals Group Ltd [ASX:FMG] is a good proxy stock for Chinese economic growth. As you can see in the chart below, over the past few years, FMG’s share price has been in decline.