The Fortescue Metals Group Ltd (ASX: FMG) share price isn’t flying higher alongside the rising iron price.
Iron ore jumped another 1% overnight to reach US$160 per tonne.
However, the Fortescue share price is down 0.1% at time of writing even as the S&P/ASX 200 Index (ASX: XJO) charges 0.6% higher.
Fortescue shares closed yesterday at $21.70 and are currently trading for $21.69.
What’s happening in the markets?
Iron ore is still a fair way off its July 2021 highs of US$218 per tonne. But the industrial metal has charged higher from the US$120 per tonne it was trading for on 1 January this year.
Part of the price rise is due to the increasing likelihood that China, the world’s biggest importer of iron ore, looks set to get a boost from government spending meant to stimulate the Chinese economy.
Russia’s invasion of Ukraine has also put pressure on iron ore and steel markets. Russia and Ukraine together are responsible for some 4% of the world’s annual iron ore production.
Why isn’t the Fortescue share price responding today?
So, with iron ore prices rising again, why isn’t the Fortescue share price responding today?
Part of that answer lies in the 26% gains Fortescue shares have posted since 15 March, when iron ore was trading for US$145 per tonne.
The other reason the Fortescue share price is lagging today lies with the risk-on moves in the global and local markets that’s seeing investors snapping up high-growth tech shares.
Yesterday, overnight Aussie time, the tech-heavy Nasdaq gained 1.9%.
Down under today, materials are the worst performing sector, with the S&P/ASX 200 Materials Index (ASX: XMJ) down 0.28%. As for ASX tech shares, the S&P/ASX All Technology Index (ASX: XTX) is up 2.7% at time of writing.
Long-term investors shouldn’t be fretting about the slight dip in the Fortescue share price today though. If you’d bought shares five years ago, you’d be sitting on gains of 255%.
The post Iron ore just passed US$160 per tonne. So why is the Fortescue share price slipping? appeared first on The Motley Fool Australia.
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More reading
- What’s the outlook for the Fortescue (ASX:FMG) share price in April?
- The Fortescue share price doubled the return of the ASX 200 in March
- The ASX 200 just had its longest winning streak since 2017. What’s doing?
- Fortescue share price jumps 4% higher
- Are these ASX 200 mining shares in trouble?
The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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