Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

A seasonal rebound is expected in China’s steel demand in the fourth quarter of 2021, driven by the construction sector, according to Fortescue’s CEO Elizabeth Gaines. The company estimates crude steel production to increase year over year in 2021. 


Iron ore prices have moderated from the record highs influenced by weaker-than-expected macroeconomic data in China and the implementation of crude steel production cuts, Gaines said in response to a question on the iron ore market during the earnings concall on Aug 30. She added that the impact of weather disruptions, COVID-19 outbreak will dissipate in the coming months and a seasonal rebound in steel demand is expected in the fourth quarter of 2021. 


Despite the recent volatility, constrained supply, strong ongoing demand, and robust steel exports from China could support a strong rebound of steel demand in Q4, she said.


The company has guided FY2022 iron ore shipments at 180-185mt and C1 cost at $15.0015.50/wmt.


FY2021 financials

Fortescue achieved the highest ever full-year shipment in FY2021 at 182.2mn mt, which resulted in record earnings and cash flow supported by strong customer demand. 


Revenue in FY2021 rose to $22.3bn, up 74pc from FY2020. Iron ore sales volume increased by 2pc to 181.1mn mt from a year ago. Average revenue in the year increased by 72pc to $135/dmt.


In FY2021, underlying EBITDA rose to $16.4bn, up by 96pc from FY2020 with the underlying EBTIDA margin up by 73pc or $99/dmt. Net profit after tax increased to $10.3bn in FY2021, up by 117pc from the prior year. 

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