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The best iron ore stocks on the ASX (2023)

We look at some of the top stocks to watch as iron ore prices fall.

Iron ore stocks are a staple on the Australian stock market, with mining stocks making up a significant chunk of the biggest 200 listed companies (S&P/ASX200 index).

Along with growth potential, major iron ore stocks in Australia tend to be some of the top dividend payers. And Australia's three largest iron ore stocks BHP (BHP), Rio Tinto (RIO) and Fortescue Metals Group (FMG), are among the world's five biggest producers.

If you're looking for ASX iron ore stocks to buy, read on.

What to know before buying

Mining stocks of any kind are volatile. While Australia's biggest iron ore miners, such as BHP and Rio Tinto, are among Australia's oldest and largest corporations, their stock prices are largely influenced by the global supply and demand for steel.

Iron ore prices are also largely influenced by China's demand - the biggest buyer of Australian iron ore. With ongoing trade tensions between Australia and China over the last few years, Australian iron ore companies could see profits fall if China increases tariffs on Australian goods.

Demand for iron ore is also influenced by the strength of China's GDP. If China's economy is growing at a healthy pace, it will look to purchase more iron ore to fuel ongoing construction. However, construction will likely slow if China experiences a slow-down.

Iron ore stocks to watch in 2023

It's not easy picking quality stocks. To help identify iron ore stock picks for 2023, we used Finder's proprietary algorithm to filter Australian-listed companies that have strong fundamentals. We take into account historical prices, dividends, revenue growth, (low) price volatility and profit margins, which might indicate a quality stock.

To avoid speculative stocks, we only include companies with a market cap of more than $1 billion. In order to better compare historical data, we filtered out stocks that have been listed on the ASX for less than five years.

This doesn't mean these are the best stocks for you. Always do your own research and chat with a professional when in doubt.

Australia has three powerhouse Iron Ore miners: BHP, Rio Tinto and Fortescue Metals. All three will be in a great position to benefit if China’s Iron Ore demand increases this year. Cash flows remain healthy, valuations are attractive, and their huge dividends are a win for investors. Any short-term weakness could be seen as an opportunity for investors, with China’s economic slump likely to pick up over the next 12 months.

Josh Gilbert

Josh Gilbert
Market Analyst, eToro

The algorithm was last updated 30 June 2023.

How did we pick this list?

We use a proprietary algorithm that rates ASX-listed stocks based on price performance, profit, revenue and dividends. The information provided is general in nature, not personal financial advice, and your personal objectives, financial situation or needs have not been taken into consideration. The companies displayed on this page may not be the best for you and you’re encouraged to do your own research. Always remember that past performance is no guarantee of future results. Investments can go up and down and we do not guarantee the performance of or returns of any investment. For more information about our algorithm, head to our stock ranking page.

Fortescue Metals (FMG.AU)

Fortescue Ltd engages in the exploration, development, production, processing, and sale of iron ore in Australia, China, and internationally. It explores for copper, gold, and lithium deposits; and rare earth elements.
  • Market cap: A$76.975 billion
  • YTD performance: 4.94%
  • 1-year performance: 30.88%
  • 5-year performance: 268.6%
  • P/E ratio: 8.5911
  • Headquarters: Australia

Bluescope Steel Ltd (BSL.AU)

BlueScope Steel Limited produces and sells metal coated and painted steel building products in Australia, New Zealand, Asia, North America, and internationally. The company operates through five segments: Australian Steel Products, North Star BlueScope Steel, Coated Products Asia, Buildings and Coated Products North America, and New Zealand & Pacific Islands.
  • Market cap: A$10.49 billion
  • YTD performance: 31.27%
  • 1-year performance: 30%
  • 5-year performance: 184.23%
  • P/E ratio: 12.8641
  • Headquarters: Australia

Champion Iron Ltd (CIA.AU)

Champion Iron Limited engages in the acquisition, exploration, development, and production of iron ore deposits in Canada. Its flagship projects include the Bloom Lake Mine located in south end of the Labrador; the Consolidated Fire Lake North project that includes the Fire Lake North, Don Lake, Bellechasse, and Oil Can deposits situated in Quebec; and the Kamistiatusset project located in the Labrador.
  • Market cap: A$3.494 billion
  • YTD performance: 38.74%
  • 1-year performance: 25.29%
  • 5-year performance: 354.49%
  • P/E ratio: 10.5313
  • Headquarters: Australia

Sims Limited (SGM.AU)

Sims Limited engages in buying, processing, and selling ferrous and non-ferrous recycled metals in Australia, Bangladesh, China, Turkey, the United States, and internationally. The company operates through six segments: North America Metals, Investment in SA Recycling, Australia/New Zealand Metals, UK Metals, Global Trading, and Sims Lifecycle Services.
  • Market cap: A$2.343 billion
  • YTD performance: -11.77%
  • 1-year performance: 1.11%
  • 5-year performance: 106.78%
  • P/E ratio: 16.4054
  • Headquarters: Australia

Stanmore Coal (SMR.AU)

Stanmore Resources Limited engages in the exploration, development, production, and sale of metallurgical coal in Australia. The company holds a portfolio of 2,000 square kilometers of prospective and granted exploration tenements throughout the Bowen and Surat Basins.
  • Market cap: A$2.975 billion
  • YTD performance: 298.77%
  • 1-year performance: 30.77%
  • 5-year performance: 559.05%
  • P/E ratio: 4.0741
  • Headquarters: Australia

Important: The standard brokerage fee displayed is the trade cost for new customers to purchase $1,000 of either Australian or US shares. Where a platform charges different fees for both US and Australian shares we show the lower of the two. Where both CHESS sponsored and custodian shares are offered, we display the cheapest option.

Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades. Read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) for the product on the provider's website.

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