The Fortescue quarterly ironore shipments to Australia are increasing By Stocksak

© Stocksak. FILEPHOTO: Fortescue Metals Group’s logo graces their Perth, Australia headquarters on November 11, 2015. REUTERS/David Gray

By Jaskiran Singh

(Stocksak). Australia’s Fortescue Metals Group, (OTC:) reported Thursday a 4.2% increase on iron ore shipments in the first quarter. This was due in part to increased production at its key operations in Western Australia. However, it also said that rising prices for diesel and labor had contributed to rising costs.

The production report from the No.4 global iron ore miner was made against the backdrop that steel prices have been sliding as top consumers China’s strict COVID-19 curbs, and the under-pressure property sector have slammed their economy.

Rio Tinto (NYSE) forecast last week that annual iron ore shipment would be lower than it had previously forecast. BHP, however, stated that it expects macroeconomic uncertainties to continue to impact supply chains and energy costs as well as labour markets in the near term.

Iron ore prices are set to finish 2022 at their lowest level in three or four years, and will likely remain weak next year, according to a Stocksak survey.

Fortescue shipped 47.5mt (mt) iron ore in the September quarter, compared to 45.6mt a year ago. Kaan Peker, RBC Capital Markets analyst, said that the quarterly results were broadly in line with the brokerage’s estimates.

However, the miner’s actual costs rose 16% to $17.69 for a wet metric tonne (wmt).

The company maintained its full-year guidance and expects to ship between 193 mt & 192 mt of ore fiscal 2023.

The miner stated that its Iron Bridge project would produce 22 mt/annum of high quality magnetite concentrate. Production is expected to begin in the March 2023 quarter. It also reiterated its cost estimate of $3.6 billion to $3.8 million.

Fortescue’s shares rose 0.8% to A$16.26 at 2327 GMT, while the wider market rose 0.3%.

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Stocksak Editorial

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