It’s no secret that ASX shares have had a pretty pleasing end to this week’s trading. Since Wednesday morning, the S&P/ASX 200 Index (ASX: XJO) is up a robust 2.5%, including today’s gain of 0.4% thus far. But that’s nothing compared to the Fortescue Metals Group Limited (ASX: FMG) share price.
Over the same period, Fortescue shares have gone from $17.15 a share to the $18.51 the ASX 200 iron ore miner is commanding today at the time of writing. That’s a very robust gain of 7.9%. What’s more, Fortescue reached intra-day highs of $18.69 during today’s session. That represents a gain of 8.8%. Not bad for just a few days.
So what’s been behind this strong rally?
Well, as you might guess, the most probable explanation is the price of iron ore itself. Unlike other major miners like BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO), Fortescue is almost a pure iron ore play. That means its fortunes largely rise and fall on the back of the iron ore price itself.
And iron ore has indeed seen some solid gains over the past few days. According to Business Insider, the iron ore price was fetching just under US$145 a tonne midweek. But as it stands today, iron ore prices have risen strongly since then, and are currently asking US$149.65 a tonne.
As such, this is the most likely reason why we have seen a surge in the Fortescue share price. Perhaps investors were a little bit relieved too. Iron ore spent most of last week falling in price. On 8 March, it was over US$160 a tonne, so that’s a big fall to the midweek price of under US$145.
Fortescue share price snapshot
After the blistering share price gains we saw Fortescue enjoy last year (not to mention the monster dividends), 2022 has been far more muted for Andrew ‘Twiggy’ Forrest and other Fortescue shareholders.
Even after this week’s late gains, the company is still down almost 7% year to date. It’s also down close to 9% over the past 12 months. But even so, Fortescue has given shareholders an eye-watering return of 195% over the past 5 years.
At the current Fortescue share price, this ASX 200 miner has a market capitalisation of $55.94 billion, with a stupendous trailing dividend yield of 16.07%.
The post Red gold! Fortescue (ASX:FMG) share price surges 8% in 2 days appeared first on The Motley Fool Australia.
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More reading
- ACCC takes Facebook’s owner Meta Platforms (NASDAQ: FB) to court over crypto scam ads
- Fundie tells why two-thirds of all dividends come from just 7 ASX shares. Guess which ones?
- Fortescue (ASX:FMG) share price jumps as iron ore price soars
- Why are ASX 200 mining shares having such a dire day?
- Why is the Fortescue Metals (ASX:FMG) share price sliding 5% today?
Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. 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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