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Fortescue’s iron-ore shipments rise on strong China demand

Fortescue Metals Group on Thursday reported a 4.7% jump in iron-ore shipments in the second quarter from the first, as global miners benefit from soaring demand in top steel producer China.

The average price the company received for its iron-ore during the quarter rose a whopping 60.5% to $122 per dry metric tonne, realising 91% of the 62% Platts benchmark average.

Last week, Fortescue forecast half-year net profit after tax between $4 billion and $4.1 billion, a solid jump from the $2.45 billion recorded a year earlier.

Rivals BHP Group BHP.AX and Rio Tinto RIO.AX also reported strong iron ore output for the period and sounded upbeat on the commodity’s outlook, banking on sustained demand from China.

Fortescue’s quarterly shipments were flat on an annual basis at 46.4 million tonnes (Mt), but in line with estimates from UBS.

The Perth-based miner maintained its full-year shipment target of 175 Mt to 180 Mt, and said it was “well-placed” to meet the strong demand.

Meanwhile, for the Eliwana mine in Pilbara, where the first ore was processed last month, Fortescue forecast a capital expenditure of about $1.38 billion, up from an early estimate of $1.28 billion.

The company is also undertaking a detailed review of the COVID-19 impact and related construction costs at its Iron Bridge project, which is due to produce the first ore in the first-half of 2022.
Source: Reuters (Reporting by Arpit Nayak and Anushka Trivedi in Bengaluru; editing by Aditya Soni and Sriraj Kalluvila)

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