Looking for ASX shares to buy now without spending a fortune?
Below we look at three top S&P/ASX 200 Index (ASX: XJO) mining stocks that have been heavily sold down in 2024.
While that doesn't necessarily mean they might not have further to fall shorter-term, I believe these are ASX shares to buy now for patient investors with an eye on long-term gains. Not to mention the two fully franked dividend payments they'll receive each year.
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ASX mining shares to buy now with less than $1,000
You're most likely familiar with the three ASX 200 mining stocks in question.
Namely Fortescue Metals Group Ltd (ASX: FMG), BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO).
Here's how they've performed so far in 2024:
- BHP shares are down 16% at $42.37
- Rio Tinto shares are down 14% at $117.34
- Fortescue shares are down 19% at $23.80
Now you'll notice that Rio Tinto shares trade for almost five times as much as Fortescue shares and nearly three times as much as BHP shares. So, the amount of these ASX shares to buy now will depend on whether you want to own the same number of shares in each company or spread your $1,000 evenly between them.
Why have the ASX 200 miners come under selling pressure?
I believe after the big 2024 sell-off, these three ASX shares are good buys now.
Some of the selling pressure has come amid a rout in nickel markets, with Indonesia ramping up its nickel mining. That's seen the Australian miners call for a global distinction between environmentally friendlier "clean nickel" and the much cheaper "dirty nickel" that comes from Indonesia.
While that process is still evolving, I believe a world focused on sustainability will eventually reward the big miners for their cleaner nickel by paying higher prices, or by taxing dirty nickel producers. Either way, investors buying these ASX shares now could see an uptick in their fortunes down the road.
The biggest headwind that's hit these ASX 200 mining stocks in 2024, however, is the big fall in iron ore.
Iron ore counts as the biggest revenue earner for all three companies.
The steel-making metal kicked off 2024 trading for US$145 per tonne. But it's been mostly downhill from there.
Iron ore dipped below US$100 per tonne on Friday amid ongoing concerns over rising Chinese stockpiles and lower levels of steel manufacturing.
As to where iron ore will be trading over the rest of the year and in 2025, forecasts vary from lows of US$85 per tonne to highs of more than $125 per tonne.
And a lot of that will depend on China's growth outlook.
Capital Economics' chief Asia economist Mark Williams, has this rather bearish take on China's real estate sector (courtesy of The Australian Financial Review):
Property sales and project starts have collapsed. But property construction activity has retreated only a little. It is likely to halve in the next few years, triggering similar falls in demand for construction inputs.
So, why do I think these are still three ASX shares to buy now?
Largely, because I don't believe Chinese President Xi Jinping can afford to let China's economy slide much further. Meaning the rather tepid stimulus measures we've seen from the Chinese government over recent months could see some sizeable boosts yet this year.
I'm also encouraged by the fact that copper prices have gained more than 6% in 2024, trading for US$8,545 per tonne on Friday.
That bodes well for the prospects of broader global growth. This should support the medium-term outlook for the big miners and bolsters the case to buy these three ASX shares now after 2024's big sell-down.
And don't forget the dividends you'll get from buying these ASX shares.
Despite their payouts falling from the 2022 highs, the retrace in the big miners' share prices still sees them trading at some juicy, fully franked yields.
At current share prices:
- BHP shares trade on a yield of 5.5%
- Rio Tinto shares trade on a yield of 56%
- Fortescue shares trade on a yield of 8.8%
