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

Fortescue anticipates higher iron ore shipments in FY2020 based on its performance in the first half of the fiscal year. 


The Australian miner expects shipments reach 170-175mt by the end of the year, the upper range of its guidance.


The company lowered its cost guidance from $13.25-13.75/wmt to $12.75-13.25/wmt because strong operational performance during H1-2020 reduced cash production costs to $12.54/wmt.


In the second quarter ended December 31, 2019, Fortescue delivered 46.4mt in iron ore shipments—a 9pc rise over Q2-2019. 


The company mined 54.6mt of ore in Q2-2020, increasing output by 11pc over the 49.2mt mined in Q2-2019. It processed 46.2mt of iron ore during the quarter, increasing by 9pc over the 42.5mt during the same quarter in FY-2019.


During Q2-2020, the company benefited from developing mining areas in the previous quarter, which reduced its strip ratio to 1.3 and maintained its year-to-date strip ratio of 1.5.


The miner attributed its strong Q2 performance to sustained steel demand, which resulted in strong products sales and, by extension, higher margins. 

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