Australia's Fortescue pares annual iron ore shipments guidance after cyclone
(Adds CEO comments, average realized price in quarter,
April 18 (Reuters) - Iron ore miner Fortescue Metals Group
Ltd on Thursday reported flat third-quarter iron ore
shipments and joined other big miners in trimming its annual
shipments forecast because of disruptions caused by a tropical
The world's no. 4 miner of the steelmaking commodity cut its
fiscal 2019 shipments estimate to 165 million-170 million
tonnes, down from 165 million-173 million tonnes.
Fortescue shipped 38.3 million tonnes in the quarter to
March 31, compared with 38.7 million tonnes in the same period
last year, but above an average of estimates of 36.5 million
tonnes by Goldman Sachs and UBS.
"Closure of the Port Hedland port, combined with localised
flooding in the area caused by Tropical Cyclone Veronica in late
March, resulted in the loss of five days of shipments equating
to 2.5 million tonnes," Chief Executive Officer Elizabeth Gaines
The impact of the cyclone, coupled with a dam disaster in
Brazil that restricted Vale SA's production, has led
to a surge in iron ore prices this year, propelling Fortescue's
stock about 80 percent higher in 2019.
Fortescue has been attempting to shore up demand by moving
to produce higher grade iron ore, given that its lower grade
products had fallen out of favor with Chinese buyers facing
The company recently started shipping mid-grade iron ore to
pump up its margins, and reiterated that it expected to deliver
8-10 million tonnes of the new product in fiscal 2019.
The combination of the mid-grade iron ore and higher prices
for the steelmaking material helped drive Fortescue's average
realised price 47 percent higher over the previous quarter to
$71 per dry metric tonne in the period, it said.
Earlier in April, the miner said it would spend about $2.6
billion with a Taiwanese partner to develop a "premium product"
iron ore project in Western Australia.
"The Iron Bridge product will increase our average grade,
providing Fortescue with the ability to deliver the majority of
our products at greater than 60 percent iron grade," Gaines
Bigger rivals BHP Group and Rio Tinto
both cut their forecasts for annual iron ore
output earlier this week due to Cyclone Veronica.
(Reporting by Aditya Soni and Ambar Warrick in BENGALURU;
editing by Richard Pullin)
First Published: 2019-04-18 01:15:53
Updated 2019-04-18 01:47:55
© 2019 Thomson Reuters. All rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. "Reuters" and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.