Australian Fortescue’s Apr-Jun iron ore exports rise to record 46.5 mil wmt

30th july 2018

Australian miner Fortescue Metals Group exported a record 46.5 million wet mt of iron ore in the April-June quarter and 170 million mt in fiscal 2017-2018, it said Thursday.

“Importantly, this was delivered while maintaining our focus on costs which decreased by 7% compared to the March quarter,” Fortescue CEO Elizabeth Gaines said.

The June quarter shipments are up 4% from a year earlier and 20% above the weather- and maintenance-impacted March quarter. The fiscal year total was close to flat with a year earlier, the company’s quarterly results showed.

In a research note Thursday, JP Morgan described Fortescue’s performance as strong.

“While price realization, net debt and costs are all likely to be broadly in line with market expectations, the fact that FMG could ship record quarterly volume, into a market where demand is skewed away from lower grade ore, is a positive,” it said.

“This should help allay some market concerns that FMG was not able to sell all of its product,” it added.

The world’s fourth-largest iron ore producer said it expected to export 165 million-173 million wmt of ore in fiscal 2018-2019 “with a focus on optimizing margins and meeting market demand in product mix and volumes through our fully integrated mining operation.”

“FY19 guidance is broadly as expected, although capex for Eliwana appears to have been brought forward,” JP Morgan said.

The capital cost of the Eliwana project was $1.275 billion and was expected to deliver first ore in December 2020, Fortescue said. The company’s guidance for total capital expenditure in fiscal 2018-2019 was $1.2 billion, it added.

The Eliwana project was intended to support the introduction of a 60%-Fe grade product, with supply due to start from existing operations in January-June next year, Fortescue said.

Non-China markets accounted for 9% of its exports during the June quarter, it said. This took exports to these markets in the entire fiscal year to 13.2 million wmt, up 103% on the year, it added.

“There is good growth in Vietnam, in Indonesia, in India, in Malaysia — these are all areas of interest to us, because there are new facilities being built and expanded there,” Fortescue’s director of operations Greg Lilleyman said in a media briefing Thursday.

Source: S&P GLOBAL PLATTS