How Iron Ore Prices Are Affecting Fortescue Metals’ Share Price

At the time of writing, shares of Fortescue Metals Group Ltd [ASX:FMG] are down by 1.37%, to $3.61 per share.

Fortescue Metals Group is considered a blue chip company and tends to move with the market. That said, the ASX 200 Index is up by 19.6 points to 6,184.9 points at time of writing:

ASX 200 Index graph data
Source: CommSec

What to look for in Fortescue Metals’ share price

There’s little explanation why Fortescue Metals Group is down today, with the market up. The company hasn’t reported an announcement. That said, considering the recent slump in the Aussie market, Fortescue Metals Group may be seeing a lower share price as a result:

Fortescue Metals' Share Price

Source: CommSec

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Major support stands around $3 per share on the chart above. Minor support starts around the current share price, roughly where Fortescue Metals Groups is trading today.

Iron ore impacting Fortescue Metals’ share price?

Let’s take a look at the iron ore price ― the main contributor to Fortescue Metals Groups earnings:

Iron ore chart

Source: tradingview.com

The iron ore price has traded sideways for most of the year, despite being volatile. There’s little indication whether the price will move higher or lower in the future. That said, given iron ore is the main source of Fortescue Metals Groups revenue, a stable iron ore price isn’t necessarily a bad thing.

A break above US$70 per tonne could see a re-test of 2018 highs.

The bottom line: Fortescue Metals Group looks mostly exposed to market risks today, rather than the iron ore price. We will track this story once a week and analyse future developments. That said, the share price is currently trading around a minor support region and could head lower, which is happening today.

Regards,

Jason Stevenson,
Resources Analyst, Markets & Money

PS: Interested in mining stocks? My free new investor report, ‘The Top 10 Mining Stocks for 2018’, does exactly what it says in the name. I look at 10 companies that I believe could potentially make you huge money this year, and beyond. To download that report free, go here.


Jason Stevenson is Markets & Money’s resource analyst. He shares over a decade’s worth of investing and trading experience across resource stocks and commodity futures and options. He originally studied accounting and finance at Curtin University, where he was awarded a first-class honours degree. His professional background stems across high-net-worth, top tier accounting (corporate finance, tax and auditing), and sell-side equities research. Before joining the team at Markets and Money, Jason worked at boutique firms which advised fund managers and high-net-worth clients on where to invest. Whether it’s gold, crude oil, copper or an obscure metal like vanadium, you can rely on an in-depth analysis in Markets and Money. Jason also brings you extensive macro, political and geopolitical analysis from around the world. He leaves no stone unturned when it comes to telling the truth. Jason is also the lead analyst of Gold Stock Trader, a premium service for investors serious about precious metal stocks. Websites and financial e-letters Jason writes for:


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