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Iron Update: The good ol’ days are here again as iron spot price surges

Sebastian Bowen
iron ore price

Iron miners have been some of the best performing large cap shares on the ASX in June (and 2019) so far. This has been readily assisted by the price of iron ore rising from around US $70 per tonne at the start of the year to todays levels of US $110 per tonne – a five-year high. Also chipping in has been the Australian dollar. The Aussie started 2019 buying around 72 US cents but today is changing hands around the 68-cent mark (around a 5.5% drop YTD). Iron is sold in US dollars, therefore a cheaper Aussie dollar makes iron ore exports more valuable.

Iron ore has spiked over 10% in the past two weeks alone, so its no surprise resource investors are getting excited. Here’s how the big iron miners are fairing at the end of trade today

BHP Group Ltd (ASX: BHP)  

The ’big one’ – BHP shares ended trade today around the $40.16 mark, which is very close to its 52-week high of $40.43. BHP is now approaching the price levels we saw at the height of the mining boom in 2011 (and that was when our dollar was at parity).

Rio Tinto Limited (ASX: RIO)

Rio Tinto shares have ended the trading day at around $103.70 – slightly down from yesterday’s close but still not too far from its 52-week high of $107.99 it hit last month. Rio shares have spent the last five-years on a slow but steady upward trajectory from the $40 level we saw in 2016. When Rio broke the $100-mark in April this year, it was for the first time since 2008!

Fortescue Metals Group Ltd (ASX: FMG)

Fortescue shares have ended the day sitting at the $8.50 mark, which is up substantially from its open of $8.32 but still a bit off the 52-week high of $9.34 it hit last month. Like Rio Tinto, the Fortescue share price is now approaching levels not seen since 2008 (when it broke the $10 level). Interestingly, Fortescue shares have a price-to-earnings ratio of around 20, which is substantially higher than BHP and RIO (16.5 and 9.1 respectively).

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019