The Fortescue Metals Group Limited (ASX: FMG) share price was out of form in October.
During the month, the iron ore giant's shares lost almost 13% of their value.
This compares very unfavourably to the ASX 200 index, which charged 6% higher last month.
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Why did the Fortescue share price tumble in October?
There were a couple of catalysts for the weakness in the Fortescue share price in October.
The first was a sharp pullback in iron ore prices amid concerns over demand in China and increasing supply.
December futures for the steel-making ingredient were down as low as US$75.20 a tonne on Monday, which is half the price they were commanding a little over seven months ago.
This doesn't bode well for Fortescue, particularly given that it produces a lower grade product which commands a lesser price from end users.
What else?
Fortescue recently released its decarbonisation plans for the Pilbara. After polluting the earth for a couple of decades, Fortescue is now aiming to hit net zero emissions by 2030.
However, doing so will come at a significant cost and is expected to result in the miner's dividend payments dwindling in the coming years.
While the announcement was made in late September, a number of brokers were discussing the impacts in October following a site visit. One of those was the bearish Goldman Sachs.
Once again, the broker revealed that one of the key reasons for its sell rating and $13.80 price target was the company's decarbonisation spend.
It stated that its analysts "continue to rate FMG a Sell on" its valuation, the widening of low grade iron ore price discounts, Iron Bridge execution and ramp up risks, "[u]ncertainties around Fortescue Future Industries (FFI) diversification and Pilbara decarbonisation and impact on dividend and balance sheet.
All in all, Goldman expects Fortescue's share to be offering yields as low as 3% from FY 2024.
In light of this, it is reasonable to presume that some income investors were hitting the sell button last month, putting additional pressure on the Fortescue share price.
