The Fortescue Metals Group Limited (ASX: FMG) share price is under pressure on Friday after iron ore prices fell overnight.
At the time of writing, Fortescue shares are down 5.17% to $24.94.
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What's driving the Fortescue share price?
The Fortescue share price has erased its weekly gains and retreated from its Thursday record close of $26.50 following concerns that Chinese demand might fall in the near-term.
Iron ore spot prices tumbled overnight to below US$200/tonne for the first time since May. According to Trading Economics, iron ore prices are currently US$197/tonne.
In addition, China's most-traded iron ore futures contract for September delivery on the Dalian Commodity Exchange is currently trading 7.3% lower to around 1,030 yuan (US$159).
Driving the sudden reversal of iron ore prices could be China's plans to start reducing its steel production in the second half of this year.
According to Mining.com, analysts at JPMorgan think "it is reasonable to expect second-half steel production growth in China will slow down meaningfully from the first half".
However, JPMorgan also expected Chinese demand to pick up in the fourth quarter, leading a rebound in both steep prices and margins.
Why aren't other iron ore majors falling?
The BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue share prices typically move in tandem given their focus on iron ore.
However, the BHP and Rio Tinto share prices are currently trading slightly higher, up 0.66% and 0.6% respectively.
The resiliency of BHP and Rio Tinto could be attributed to their more diversified material portfolios and recent moves into critical renewable materials such as nickle and lithium.
A weak finish to what was a record-setting week
The Fortescue share price had a record finish on Thursday, closing at $26.50.
This week, the company released its June quarter and full year FY21 activities result with a solid performance across the board.
Highlights include FY21 iron ore shipments of 182.2 million tonnes, topping its guidance of 182 million tonnes. It also had a solid US$135/dry metric tonne (dmt) pricing for its iron ore for the full year FY21.
