Fortescue meets guidance for iron ore shipments
Andrew "Twiggy" Forrest's Fortescue Metals Group has met its forecasts for iron ore shipments for fiscal 2018, after shipments accelerated 20 per cent in the June quarter to hit a new record.
The iron ore major kept costs under control, with cash production costs of $US12.17 per wet metric tonne for the quarter, in line with the June quarter of the previous year.
Fortescue's June-quarter production report, released to the ASX before the market opened on Thursday, reported higher prices for contracts entered into during the three months.
Fortescue, which has been experiencing significant discounts on its ore shipped to China over the past year as buyers favour ore with higher iron content, revealed average contract prices during the quarter rose to 63 per cent (from 62 per cent) of a widely accepted industry benchmark price. This equates to about $US40.95 per dry metric tonne of ore.
The miner's June-quarter shipments, at 46.5 million tonnes, set a new record for the quarter. The overwhelming majority of FMG's iron ore shipments, 91 per cent, went to China.
But Fortescue also confirmed that iron ore shipments to other markets more than doubled during fiscal 2018 to 13.2 million tonnes.
Chief executive Elizabeth Gaines said Fortescue had delivered an "outstanding operational performance" during the June quarter, and was in a strong position for fiscal 2019.
"It was a strong finish to fiscal 2018, with the team delivering record shipments of 46.5 million tonnes in the quarter to achieve our target of 170 million tonnes for the full year. Importantly, this was delivered while maintaining our focus on costs, which decreased by 7 per cent compared to the March quarter,” she said.
“Building on our outstanding operational performance in the quarter, Fortescue has delivered on key strategic initiatives which position us for the next phase of growth while improving safety and productivity, ensuring we remain the lowest cost producer of seaborne iron ore."
Fortescue's quarterly report comes shortly after fellow iron ore majors BHP and Rio Tinto also revealed strong quarterly production reports.