FMG offers bigger discounts for May deliveries
Australia’s Fortescue Metal Group (FMG) has agreed on bigger discounts with certain Chinese customers for its May deliveries, as seaborne supplies continue to increase.
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Concessions for 58.3% Fe Fortescue Blend will be increased to 4.5%, while those for 56.5% Fe Super Special Fines will rise to 7.5%, up one percentage point each from the discounts in April, a mill source in northern China told Steel First on Wednesday April 16.
The source said some of FMG’s larger clients had agreed the discounts with the miner, and more are expected to agree on the deduction.
“The miner is currently placing priority on market share rather than profit margins,” she added.
The company has been steadily increasing discounts over the past few months, except for February when China observed a week-long Chinese New Year holiday.
The discount was 1.5% in January and February, 2% in March and 3.5% in April for Fortescue Blend; and 1.5% in December 2013, 4% in January and February, 5% in March and 6.5% in April for Super Special Fines, market participants told Steel First.
“Increasing seaborne supply from FMG’s own mine expansions as well as from its peers in Australia adds pressure to the market,” an iron ore trader in Beijing said.
FMG and BHP Billiton commenced production at their respective 40 million-tpy Kings Mine and 35 million-tpy Jimblebar project in Western Australia in the March quarter.
FMG shipped 31.5 million tonnes of iron ore during the period, up 13% from the previous quarter and up 56% year-on-year, the company said on Wednesday.