Why are ASX 200 mining shares in the green today?

Three satisfied Whitehaven coal miners with their arms crossed looking at the camera proudly

Three satisfied Whitehaven coal miners with their arms crossed looking at the camera proudly

S&P/ASX 200 Index (ASX: XJO) mining shares are in the green in early afternoon trade.

While the ASX 200 is down 0.2%, the BHP Group Ltd (ASX: BHP) share price is up 0.4% to $45.22 per share.

Meanwhile, rival ASX 200 mining share Rio Tinto Limited (ASX: RIO) has gained 1.4% today while Fortescue Metals Group Limited (ASX: FMG) shares are up 0.5%.

Why are ASX 200 mining shares bucking the wider selling trend?

BHP, Rio Tinto and Fortescue all look to be receiving some tailwinds from a 2.8% boost in iron ore futures, which The Australian reports have lifted to US$130 per tonne.

This will come as welcome news to investors in the big miners, who’ve watched their share prices come under pressure as the iron ore price has trended sharply lower over the past month.

In early April, iron ore was fetching over US$160 per tonne.

The industrial metal has come under pressure on two fronts.

First, a hawkish US Federal Reserve has sent the US dollar soaring higher. With iron ore priced in US dollars on international markets, a rising dollar has sent the price lower, crimping the profit margins of ASX 200 mining shares.

Second, demand for iron ore from China – the top destination for Aussie iron ore – remains sluggish. That’s partly due to steel output limits put in place by the government. And likely partly due to a slowing Chinese economy as the nation places millions in lockdown to combat COVID-19 in its continuing zero-virus policy.

How have the mining giants been performing?

As you’d expect with the sharp decline in iron ore prices over the past month, all three of the ASX 200 mining shares we’ve covered above have slipped since 11 April.

The BHP share price is down 12.6%; the Rio Tinto share price is down 11.1%; and the Fortescue share price has fallen 9.3% over the month.

By comparison, the ASX 200 is down 6% during that same period.

The post Why are ASX 200 mining shares in the green today? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Fortescue right now?

Before you consider Fortescue, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Fortescue wasn’t one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

More reading

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 Scott Phillips.

from The Motley Fool Australia https://ift.tt/QhP5Vol

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s