Fortescue on Thursday forecast higher iron ore shipments for financial year 2024 as its magnetite operations in Western Australia ramp up while posting fiscal 2023 shipments at the top end of its guided range.
The world’s fourth-largest iron ore miner adds to increasing shipments by peers Rio Tinto and BHP Group which are expected to cap second half iron ore prices and profits, even as China supports its struggling steel sector.
Fortescue expects to ship between 192 million and 197 million metric tons of the steel-making commodity in the year, up from 192 million metric tons shipped in fiscal 2023. That compares with a Goldman Sachs estimate of 199 million metric tons.
“Our hematite operations are performing strongly and we are focused on delivering growth through the safe and efficient ramp-up of Iron Bridge, unlocking the potential of Belinga and decarbonizing our iron ore operations,” Fortescue Metals CEO Fiona Hick said.
The company’s fiscal 2024 shipment forecast includes about 7 million metric tons from Iron Bridge on a 100% basis.
Iron Bridge, a major plank in the group’s growth strategy, is expected to reach up to 22 million tonnes of 67% magnetite concentrate annually after ramping up over two years, which will significantly improve the quality of Fortescue’s iron ore.
The project started producing magnetite concentrate during the quarter and the first concentrate was loaded on ship on July 24, it said, later than planned.
The company had earlier forecast about a 1 million metric tons shipment contribution from Iron Bridge for fiscal 2023, after multiple cost blowouts and delays.
Fortescue shipped 48.9 million metric tons of ore in the June quarter, marginally lower than a year earlier.
Costs are creeping up with fiscal 2024 capital expenditure seen at $2.8 billion to $3.2 billion, up by $100 million from guidance for the 2023 fiscal year, and hematite costs at $18 to $19 a wet metric ton from $18 to $18.75.
It raked in average revenue of $96.34 per dry metric ton in the fourth quarter, pegging its ore at a 13% discount to the average Platts 62% benchmark, significantly better than the 22% discount a year earlier.
(By Himanshi Akhand, Roushni Nair and Melanie Burton; Editing by Devika Syamnath and Sonali Paul)
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