Fortescue Metals Group – world’s 4th largest iron ore producer, recorded a decline in iron ore production for Q3 FY’18. The mined ore production for the quarter ended Mar’18 was recorded at 41.6 MnT, down 12% Q-o-Q as against 47.5 MnT in Q2 FY’18.
On yearly basis, production volume decreased by 7% in Q3 FY’18 as against 44.7 MnT in Q3 FY17.
The miner shipment recorded at 38.7 MnT in Q3 FY’18, down 4% against 40.5 MnT in Q2 FY18. On Y-o-Y basis, shipments stood almost in line with shipments in Q3 FY’17 at 39.6 MnT
The Q3 FY’18 results stood down on quarterly basis owing to cyclone effecting port operations, maintenance, equipment downtime and wet weather at mines. Also, Chinese Steel demand remained subdued post New Year holidays, due to governmental regulations leading to decline in shipments for the quarter.
For FY’18 (July’17- Mar’18), the total shipment stood at 123.2 MnT down marginally as against 125.7 MnT in same period last fiscal (July’16-Mar’17).
FY’18 shipment Guidance
The FY’18 shipment guidance witnessed in line with prior laid guidance of 170 MnT. However, the Q3 FY’18 results recorded lowest since June 2014, exhibiting decline in export targets.
The company has changed its iron ore price guidance to 65% of benchmark Platts 62 CFR index for the second half of FY’18. The FY’18 first half price realization stood at 68% of plats 62 CFR index.
FMG expects greater exports in near future owing to Chinese demand for high grade ore amidst strict governmental regulations.
The company focuses on continuous innovation (such as continuous exploration and development throughout South America), improvise productivity and efficiency for ongoing cost improvements (such as Eliwana mining project and Iron Brideg Magnetite Project), and debt reduction.
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