Iron ore price, page-8902

Fortescue well-placed for Chinese demand with new iron ore fines

December 3, 2018News

The Solomon stockyard. Image: Fortescue Metals Group
Latest News

• Fortescue ships maiden cargo of West Pilbara Fines
• Rio Tinto offloads aluminium smelter to GFG Alliance
• BHP follows Rio, Fortescue with major share buyback
• Why condition monitoring is essential to reduce maintenance costs and avoid downtime

Fortescue Metals Group is preparing to meet changing Chinese demand for iron ore with its new West Pilbara Fines product.
In light of recent falling iron ore spot prices, there has been an increasing trend among Chinese iron ore buyers for lower- and mid-grade product.
The iron ore spot price for high grade 62 per cent fines has plunged in the past two weeks from $US72.50 ($98.62) to $US63.74 in part due to a growing Chinese preference for lower-grade ores for steel manufacture.
Pre-slump, the Chinese iron ore export market tended towards higher-grade iron ores produced by companies such as Rio Tinto and BHP, while the lower grades favoured by Fortescue suffered.
Fortescue’s revenue fell 18 per cent in the 2018 financial year to $US6.9 billion ($9.38 billion), while its profits fell 58 per cent in the same period to $878 million.
Speaking at the International Mining and Resources Conference (IMARC) in Melbourne at the end of October, Fortescue chief executive officer Elizabeth Gaines suggested that the trade dispute between the United States and China would not dampen short-term iron ore demand in the Asian country.
Despite this, Chinese manufacturing growth halted for the first time in two years last month according to statistics from the Purchasing Managers Index for China.
This has led to increased demand for lower cost, low- and mid-grade iron ore fines, which puts Fortescue in a good position to capitalise with its 60.1 per cent low alumina West Pilbara Fines iron ore that it announced at a conference in Dalian, China in September.
Fortescue achieved a record low direct cost of $US12.36 per wet metric tonne in 2018, a price it continues to maintain in the 2019 financial year.
West Pilbara Fines are the result of a blend of fines from the Chichester and Solomon projects in the Pilbara, Western Australia, with fines from Fortescue’s upcoming $1.7 billion Eliwana mine to be added to the mix down the line.
Related Stories

• Fortescue keeps focus on core iron ore business
• BHP follows Rio, Fortescue with major share buyback
• Fortescue CEO anticipates no trade war impact on iron ore demand
• Fortescue signs eight agreements with Chinese steel mills