FMG lowering discounts for contracted shipments from September

Fortescue Metals Group (FMG), Australia’s third-largest iron ore miner, will lower price discounts for contracted iron ore shipments from September.

Paragraph entered by Atlantic migration, in order for SteelFirst articles to display correctly on Metal Bulletin.

“FMG used to sell 56-57% Fe Super Special Fines with a 3% discount to 58% iron ore index price, and 57-58% Fe Special fines with 1.5% discount. It will lower the discounts to 2% and 1% respectively, for contracted customers from September onwards,” a trader close to an FMG-contracted steel mill, told Steel First.

“The [iron ore] market now is buoyant. It is a good time for FMG to raise prices,” another trader in Shanghai said.

Spot iron ore prices have gained traction since the beginning of the month. The Metal Bulletin 62% Fe iron ore index stood at $140.02 per tonne cfr on Monday August 12, up 7.4% since the start of the month, and up 26% from a year-low of $110.79 per tonne cfr on May 30.

“FMG has been under financial strain, and it will definitely seek to raise its iron ore sales prices whenever it is able to,” an industry analyst in Shanghai said.

The company struggled to finance its projects last year after the dive in spot iron ore prices. It suspended the development of its 40 million-tpy Kings iron ore deposit in the Pilbara region for four months in September.

The miner also recently lost a high court challenge against Australia’s mining tax. The minerals resource rent tax, which came into effect on July 1 2012, applies to coal and iron ore miners making annual profit above A$75 million ($67 million).

FMG is now aiming to bring its Kings project onstream by the end of the December quarter, boosting its total production capacity to 155 million-tpy.

What to read next
General Motors (GM) is investing $650 million to develop the Thacker Pass mine in Nevada, the largest known source of lithium in the US and the third largest in the world
Electrolysis processes developed by Boston Metal and Electra that eliminate the need for coal in steel production could be key to a net-zero emissions future for the metallics industry, attendees learned at Fastmarkets’ conference on January 17-19 in Dallas
Low supply, strong demand to spur scrap prices higher in Feb, market says
US deep-sea ferrous export prices from the East Coast to Turkey have plateaued, with a Turkish mill purchasing a cargo at prices stable from the last-reported sale
The current shortage of some higher purity grades of aluminium, such as P0610, and the robust demand for units should maintain the higher differential to prices for P1020-grade aluminium, market sources told Fastmarkets on Monday January 30
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.