NEWS
Iron Ore  

Fortescue narrows average iron ore discount

The average discount that Australian iron ore exporter Fortescue Metals receives across all its iron ore types to the 62pc Fe benchmark narrowed during July-September, as Chinese steel mills focused on raw material costs to try to lift their production margins.

Fortescue shipped 42.2mn t of iron ore during July-September, down from a record 46.6mn t for April-June but up from 40.2mn t in July September last year. It received an average contractual price of 89pc of the 62pc Fe benchmark in the period, compared with a realisation of just 67pc a year earlier and 87pc during April-June.

The narrower discount reflects generally smaller discounts for lower grade material in the market and a move up the quality scale for Fortescue, with the introduction of its West Pilbara fines (WPF) at the end of 2018 and an increase in the amount of lump that it sells over the past year. This has seen it cut sales of its low grade Super Special fines, helping boost the overall quality of its ore sold during July-September. Lump sales were lower than the firm's planned 1mn t/month at just 2mn t in the July-September quarter.

The firm's average revenue was $85/t during July-September, down from $92/t for April-September, but up from $45/t a year earlier.

Argus last assessed the 62pc Fe price at $86.20/t cfr Qingdao, down from $94.05/t at the end of September. While Fortescue reported a narrowing average discount during July-September compared with previous quarters, Argus assessments show that the discount widened over the period. The 58pc Fe price was at an 8pc discount to the 62pc Fe price on 1 July and was at an 11pc discount on 30 September. Argus last assessed the discount at 12pc yesterday.

Fortescue's cash production costs rose to $12.95/wet metric tonne (wmt) during July-September from $12.78/wmt for April-June but were down from $13.19/wmt in July-September 2018. The firm expects cash production costs will be $13.25-13.75/wmt in the 2019-20 fiscal year to 30 June.

Fortescue forecasts shipments to be 170mn-175mn t in 2019-20, including 17mn-20mn t of its 60.1pc Fe WPF product. It will have to increase its shipments marginally over the next three quarters to meet this guidance.

The firm has had a strong start to October, loading ships with deadweight tonnage (dwt) capacity of 10.52mn dwt in the first 22 days of the month, according to initial shipping data. At this rate it will load ships with around 14.8mn dwt in October, which is in line with September and above both August and July. This initial shipping data overestimates actual iron shipments by around 5pc because it is the maximum capacity of the vessels loaded.

Fortescue plans to spend $2.4bn on capital expenditure in 2019-20, mainly on the development of the Eliwana and Iron Bridge projects, which are both in Western Australia's Pilbara region. Capital expenditure was $1.2bn in 2018-19.

News No: 6961
Date: 2019/10/24 - 16:49
News Source: Argus Media

iron ore  Australian  Chinese steel mills  Fortescue Metals  dwt 

Comments:

Leave a Comment:

   
   
   
 

Vale revises down 2019 iron ore shipment projections

Brazilian iron ore producer Vale has revised lower its shipment forecasts for this year, indicating tighter supplies for the rest of 2019 that may support seaborne prices.
 

Brazil: Vale to Resume Iron Ore Operations in Alegria Mines

World’s largest iron ore miner- Vale informed yesterday through its press release that miner has got necessary authorization from the National Mining Agency to resume the operations of the Alegria Mine operation that has been halted since Mar'19.
 

Indian Low Grade Iron Ore Fines Trade Slow; Offers Inch Down

SteelMint in conversation with market participants learned that bids for Indian low-grade fines from China have come down this week following the decline in global iron ore price. Low-grade fines (Fe 57/58) assessment of SteelMint moved down to around USD 53-55/MT CFR China, as against the last assessment at USD 55-57/MT, CFR China.
 

Brazil: Iron Ore Exports Up 15% M-o-M in Oct'19

World's second-largest exporter of iron ore - Brazil has recorded an increase in iron ore export volumes to 31.2 MnT in Oct'19, as compared to Sept'19 which was at 27.14 MnT, according to trade statistics released by Brazil customs. On yearly basis, exports dropped 16% as against 37.2 MnT in Oct'18.
 

Indian Iron Ore Exports Up 53% in Oct’19 on Increase in Shipments to China

Indian iron ore exports have recorded sharp increase in Oct’19. The exports were witnessed at 1.74 MnT, up 53% M-o-M as against Sep’19 exports at 1.14 MnT. On yearly basis, the exports have depicted a significant rise as compared to Oct’18 at 0.42 MnT.
 

India: NMDC Iron Ore Rake Movement to Chhattisgarh Based Units Up 38% in Oct'19

NMDC (Chhattisgarh) supplied total 303 rakes (1.16 MnT) of iron ore in the month of Oct’19, up 59% against 190 rakes (0.73 MnT) a month before in Sept’19, according to railway movement data maintained with SteelMint.
Upcoming Events
Publications
 Mines & Metals

Mine & Business Today

 Scrap & Recycling

Ahangan

Our partners