FMG's iron ore shipments hit new record in Q3

Fortescue Metals Group (FMG) shipped a record 41.5 million tonnes of iron ore during the September quarter, marking an annualised rate of 166 million tonnes.

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Shipments were up 60% year-on-year, Australia’s third-largest iron ore miner said in its quarterly report on Thursday October 16. Volumes were also up 7% from the previous quarter.

FMG’s shipping guidance for the 2015 financial year remains at 155-160 million tonnes.

On the production front, the company mined 42.9 million tonnes of ore in the third quarter, up 23% year-on-year but down 2% from 43.8 million tonnes in April-June.

“Reduction in the mining rate was a strategic decision to reduce working capital, lowering iron ore stocks by a further 5% in the September quarter,” FMG said.

The miner added that working capital reductions are expected to continue throughout the 2015 financial year.

“Chinese steel production remains strong with the decline in construction activity in China being offset by an increase in steel exports, which are on target to reach 75-80 million tonnes in 2014,” FMG said.

FMG’s C1 cost was $32.08 per wet tonne in the September quarter, down 6% from the June quarter on “efficiencies delivered across all sites and improved production from the ore processing facilities”, according to the statement.

The delivered cost to customers for the quarter stood at $45 per wet tonne and the average cfr China realised price was $71 per dry tonne for the period.

As of September 30, FMG’s net debt position was $6.9 billion with the company holiding $2.6 billion of cash on hand. Its capital expenditure guidance for the 2015 financial year remains at $1.3 billion.

The iron ore miner ordered another four very large ore carries (VLOCs) in July for $280 million, following an initial order for four carriers in June. These VLOCs are scheduled for delivery from August 2016 through to April 2018.

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