The price of iron ore keeps going up and people are still talking about it.
The Australian Financial Review (AFR) quoted portfolio manager William Curtayne at Milford Asset Management this morning who predicts Rio Tinto Ltd (ASX: RIO) and Fortescue Metal Group Limited (ASX: FMG) 2022 earnings to be upgraded more than 100% if the iron ore price stays at US$165 a tonne.
It’s currently trading around US$170 a tonne, up nearly 80% for the year.
Let’s take a look at what big ASX metals and mining players Rio Tinto, Fortescue and BHP Group Ltd (ASX: BHP) have got going on.
How much have these ASX miners gained so far this year?
BHP, Rio Tinto and Fortescue are all up by 10.4%, 5.9% and 7.5%, respectively year-to-date.
Each company has recently touched record highs.
The BHP share price is currently around $45, Rio Tinto is trading at about $117 a share, and the Fortescue share price is roughly $25.
Rio Tinto’s dividend is presently yielding over 5%. In total, Rio Tinto paid out an interim June dividend worth $US2.5 billion. In the 2019-2020 financial year, Fortescue paid out a dividend of $1 per share.
What if China stops ordering iron ore?
Iron ore is the number one export of Australia, and China is the number one purchaser. There has been an increasingly volatile business relationship between Australia and China for some time now.
Back in August 2020, China’s share of Australian exports reached an all-time high. The AFR then noted that this record was mainly due to iron ore, especially in the June quarter.
If China decided to completely stop ordering iron ore tomorrow, it would be a blow to Australia’s export industry.
What do analysts think about these ASX share price of these miners?
Thirteen analysts rate Rio Tinto a ‘buy’ according to the latest REFINITIV stock report. The analysts have rated the 12-month price target $83.35 on the low end and $170.58 at the top. BHP received a similar rating from 14 analysts with a price target range of $27.14 to $45.36.
The analysts are currently a bit more skeptical on Fortescue. The price target spans a massive 211%, from a worse-case number of $10.34 to the best bet coming in at $32.18.
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Motley Fool contributor Gretchen Kennedy 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.
The post Can iron ore keep pumping the ASX share price of these miners? appeared first on The Motley Fool Australia.
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