US bars more food, metal imports over China’s alleged forced labor
US authorities say Chinese authorities have established internment camps for Uyghurs and other religious and ethnic minority groups.
Fortescue Metals Group Ltd on Thursday narrowly beat its full-year estimate for iron ore shipments after a record fourth quarter, as strong demand from top consumer China offset the impact of bad weather.
The world’s fourth-largest iron ore miner fared better than rivals Rio Tinto and BHP, whose June quarter output dropped because of weather disruptions in Western Australia.
Despite those disruptions, surging prices of the steelmaking ingredient and robust demand from China are expected to drive bumper earnings at miners, with Rio reporting a record first-half performance on Wednesday.
“Clearly these guys do a good job at managing their operations,” said portfolio manager Andy Forster of Argo Investments in Sydney.
“They obviously have some capital spending to do going forward, but given the volume of cash that they are generating they can all be very generous from a dividend point of view.”
Fortescue shipped 49.3 million tonnes of ore in the quarter ended June 30, compared with 47.3 million tonnes a year ago, edging past a UBS estimate of 49 million tonnes.
It reported full-year shipments of 182.2 million tonnes, above its own forecast of 178 million tonnes to 182 million tonnes, and guided shipments to 180-185 million tonnes for fiscal 2022, saying crude steel production outside of China had largely recovered to pre-covid levels.
The average price received for iron ore during the quarter rose to a record $168 per dry metric tonne, realising 84% of the 62% Platts benchmark average, down from 86% in the March quarter.
The Perth-based miner’s quarterly costs jumped 17% to $15.23 per wet metric tonne (wmt), mainly due to the impact of inflation and covid-19 related expenses.
Fortescue is preparing to bring on line its Iron Bridge magnetite ore project at the end of next year, improving the grades of its ore.
Cost inflation forced Fortescue to raise capital spending estimates for the project for the second time this year in May to $3.3-$3.5 billion, while labour constraints led it to push back first production to December 2022.
Read more: Fortescue produces first green iron ore, part of carbon neutrality goal
Midday Thursday, Fortescue’s stock was up nearly 2% on the ASX. The company has a $59.9 billion market capitalization.
(By Shashwat Awasthi, Arundhati Dutta and Melanie Burton; Editing by Maju Samuel and Gerry Doyle)
Comments