Fortescue Ltd (ASX: FMG) shares have fallen further into the red on Wednesday afternoon.
At the time of writing, the shares are down around 2% to a six-year low of $14.10 each. The last time the shares traded at this price was back in June 2020.
Today's decline means the shares have now fallen roughly 39% since reaching an annual high of $22.99 in mid-May. It's been a long and pretty consistent tumble, too.
Fortescue shares are also down 36% year to date, and 31% lower than 12 months ago.
Now I'm questioning whether the ASX iron ore miner's shares can rebound from their latest low. Or whether it's time to sell up before they tumble further.
What pushed Fortescue shares lower this year?
The ASX mining shares have been smashed by a falling iron ore price this year.
As a pure-play iron ore producer, a majority of its earnings come from iron ore mining and shipping out of the Pilbara region. This means it's tightly tied to fluctuations in iron ore prices, particularly out of China, where it earns around 88% of its annual revenue.
Iron ore is still trading close to a four-year low of around CNY 670 per ton to CNY 680 per ton this week. That's roughly a 12% decline over the past year, and 1% lower than a month ago.
According to Trading Economics, prices continue to be depressed by increasing global supply and low demand.
It said:
"Industry data showed that shipments from major producers Australia and Brazil climbed 1.3% week-on-week to 27.9 million tons as of November 2, with miners boosting output to meet their quarterly and annual production targets."
"Meanwhile, demand in China, the world's largest iron ore consumer, remained subdued as steelmakers held back on restocking amid persistently weak profit margins, softer downstream steel demand and elevated inventory levels."
The miner has also faced ongoing tensions and contract negotiations with China Mineral Resources Group (CMRG). The group has urged Chinese mills to curb delivery of iron ore from major Australian miners like Fortescue while it negotiates pricing with domestic steelmakers. The group hopes that this forces major miners into lower pricing agreements.
The falling iron ore price and contract issues have caused a significant drop in shipments, which in turn has put pressure on the miner's earnings.
With limited visibility and no clear resolution ahead with CMRG, it looks like investors are turning their back on Fortescue shares and buying elsewhere.
Is there any chance of a rebound ahead?
The experts are uncertain too.
TradingView data shows half of analysts (8 out of 16) have a hold rating on Fortescue shares. Another six rate the shares as a sell/strong sell, and two rate them as a strong buy.
The average $15.64 target price implies around an 11% potential upside, at the time of writing.
My take
A potential rebound of Fortescue's share price relies almost entirely on the outcome of CMRG negotiations. And also what implications that has on future iron ore prices.
The miner even said in its latest quarterly update that forward FY27 shipments, C1 unit cost, and capital expenditure are unchanged. But warns that, if there is no resolution by the end of the calendar year, it could begin to affect operations.
I don't think we'll see a Fortescue share price rebound in the near future.
The post Can Fortescue shares rebound from a 6-year low? appeared first on The Motley Fool Australia.
Motley Fool contributor Samantha Menzies 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.
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. 2026