The Fortescue Metals Group Limited (ASX: FMG) share price has continued its strong form lately.
At market close on Wednesday, the iron ore mining outfit's shares finished trading at $21.63, up 2.22%.
This means that Fortescue shares have surged 7.56% higher for the month of June.
In comparison, S&P/ASX 200 Index (ASX: XJO) is 1.25% in the red so far in June. This follows the Reserve Bank of Australia's rate hike yesterday, which dragged down the benchmark index.
Let's take a closer look at what's driving the miner's shares upwards.
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Iron ore prices touch one-month high
Investors are bidding up the Fortescue share price after iron ore prices reached a one-month high.
Currently, the steel-making ingredient is fetching at US$146.50 per tonne, an improvement of 9.7% for the month of June.
An easing of COVID-19 restrictions in China as well as more potential support from government is driving the price.
In addition, it appears that the market is optimistic that demand could elevate as Chinese workers return to their jobs.
According to Bloomberg, iron ore inventories at major ports dropped to an eight-month low.
With demand outpacing supply, iron ore prices could rally even further.
Recently, India raised export duties for iron ore to 50% which increases the cost for steel mills. This is likely to impact supply on the international market as it becomes more expensive to send iron ore products overseas.
Fortescue share price snapshot
Over the past 12 months, the Fortescue share price has struggled to consistently remain near the $20 mark.
The company's shares are down 3.5% for the period.
When looking at the year to date, Fortescue shares are up 12% despite a volatile start to 2022.
Based on today's price, Fortescue presides a market capitalisation of approximately $66.07 billion.
