Australian iron ore company Fortescue has forecast iron ore shipments to reach 175-180mn mt in FY2021. Its total shipment in previous fiscal year was 178.2 mn mt.
The company is seeing a recovery in global crude steel production largely supported by China’s crude steel production and a gradual recovery in the rest of the world. As per latest World Steel Association (WSA) figures, China’s crude steel production has grown by 12.7pc in October 2020 compared to prior year.
“Obviously supply continues to be constrained. On the demand side, even outside of China, our customers keep telling us there is very strong steel demand,” Danny Goeman, director of sales and marketing, said on the occasion of the start of ore processing at Fortescue’s Eliwana mine expansion, according to media reports.
Fortescue is also on track to have the first ore from its $2.6 billion Iron Bridge magnetite mine ready for export in the first half of 2022.
A steel-making recovery following COVID-19 lockdowns in countries such as South Korea, Japan and India, has also attracted cargoes that would normally go to China.
Meanwhile, iron ore prices have shot up to around $150/mt this week amid ongoing supply issues in Brazil. Brazilian iron ore producer Vale is also expected to produce 300 to 305mn mt of iron ore in the year lowering its previous target of 310mn mt. Indications are ripe that prices of iron ore will remain firm for the rest of the year.