What’s driving the Fortescue share price to an 8-week high today?

Following Friday’s 2.72% gain, the Fortescue Metals Group Limited (ASX: FMG) share price is climbing to an 8-week high today.

This comes despite the iron ore mining magnet not releasing any price-sensitive announcements since its quarterly report in late July.

At the time of writing, Fortescue shares are in the green by 4.24% to $18.91.

Wobbling iron ore prices? No worries for Fortescue

Investors are continuing to bid up the Fortescue share price regardless of iron ore prices tumbling of late.

Currently, the steel making ingredient is fetching for US$111.50 per tonne – a decline of 0.5% from Friday’s trading session.

It appears that iron ore prices are seesawing by lingering concerns regarding a potential global recession and China’s property crisis.

In addition, the recent tensions between the United States and China over Taiwan haven’t helped either.

However, even though Fortescue is closely tied with the movement of iron ore prices, a broader uplift in the sector is providing strong support.

The S&P/ASX 200 Resources Index (ASX: XJR) is up 1.54% to 5,309.6 points.

Shares in other miners, BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO) are up 0.18% and 1.71%, respectively.

Fortescue boasts one of the lowest costs positions to produce iron ore with C1 costs averaging US$15.91 per wet metric tonne.

Even if the steel making ingredient heads considerably lower, the company will still be churning out a healthy profit.

You might want to keep an eye out on 29 August when Fortescue is scheduled to report its FY22 results.

Fortescue share price snapshot

A volatile 12 months brought on by COVID-19 and depressed iron ore prices led the Fortescue share price to drop 18%.

Although, year-to-date has been far better despite the current external market challenges, down 2%

Fortescue has a price-to-earnings (P/E) ratio of 4.32 and commands a market capitalisation of roughly $55.85 billion.

The post What’s driving the Fortescue share price to an 8-week high today? appeared first on The Motley Fool Australia.

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More reading

• The iron ore price has slumped 10% in 5 days. Here’s how ASX 200 mining shares have responded.
• Up 5% in a month, is the current Fortescue share price a buy or a sell?
• ‘World’s greatest concern’: Can Fortescue really help the planet AND its profit margin?
• Is the iron ore price entering a bear market?
• Why Appen, Credit Corp, Fortescue, and Santos shares are dropping

Motley Fool contributor Aaron Teboneras 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 Scott Phillips.

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