MELBOURNE: Fortescue Metals Group Ltd on Thursday reported flat third-quarter iron ore shipments and higher costs, missing analysts’ forecasts, as it was hit by wet weather in Western Australia and a stronger Australian dollar.
Cyclone season similarly dented output for Fortescue’s bigger iron ore mining rivals Rio Tinto and BHP Group, but they have all benefited from soaring prices for the steelmaking ingredient.
Fortescue’s average revenue nearly doubled from a year ago, though it came in below forecasts.
Tight supply from Australia and Brazil has driven iron ore prices to record highs amid robust demand from China’s steelmakers, with infrastructure spending driving brisk growth in the world’s second-largest economy.
“We’re just seeing constraint on supply, and we’re seeing very strong demand. So those conditions continue to support the current iron ore price,” Fortescue Chief Executive Elizabeth Gaines told reporters.
The world’s fourth-largest iron ore miner shipped 42.3 million tonnes (Mt) in the three months to March 31, on par with a year earlier but below analysts’ forecasts around 43.3 million tonnes.
Nevertheless it maintained its outlook for 2021 shipments between 178 Mt and 182 Mt.
Cash costs rose 12% from a year earlier to $14.90 per wet metric tonne (wmt), against analysts’ forecasts of $14.20 per wmt, but Fortescue maintained its annual cash cost outlook between $13.50 and $14 per wmt.
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