The Fortescue Metals Group Ltd (ASX: FMG) share price hit a two-year high last month.
On 26 July, the S&P/ASX 200 Index (ASX: XJO) mining stock closed the day trading for $23.73 a share. You have to go back to April 2021 to find it trading at a higher level.
Investors were snapping up the miner’s shares partly based on the strong recovery in iron ore prices.
Fortescue shares, as you likely know, generate the majority of their revenue from the industrial metal.
In late May, iron ore was trading for US$99 per tonne. In July it hit recent highs of US$117 per tonne, eventually closing the month at US$107.
With that in mind, can the ASX 200 miner set a new record in August?
Can the Fortescue share price set a new record this month?
While anything is possible, I don’t expect to see the big miner trading for more than its July closing highs of $23.73 in August.
To do so, the Fortescue share price will have some significant lost ground to make up.
At the time of writing the stock is down 1.3% today, trading for $21.71 per share. That’s down 8.5% from the July high point.
To regain that lost ground and set a new two-year record high this month we’d either have to see a big lift in the iron ore price, or some big news from the company to stoke investor interest.
Lacking a crystal ball, we’ll have to wait and see if any such Fortescue share price boosting news eventuates over the coming weeks.
As for the iron ore price, it’s down a bit over 2% overnight, trading for US$105 per tonne.
And with China’s steel-hungry property sector continuing to struggle, most analysts are forecasting more falls ahead for the industrial metal.
With China’s economic woes in mind, and expectations of limited stimulus from the Chinese government, Richard Lu, a senior analyst at CRU International believes the iron ore price could fall back to US$90 per tonne in 2023.
While iron ore prices may not fall that steeply in August, I believe we’d need to see the industrial metal charge back to close to US$120 per tonne to see the Fortescue share price set a new record in August.
That’s unlikely. But as I said, anything is possible.
