fortescue rises most in 2 months on shipment

By Jason Scott

Feb. 2 (Bloomberg) -- Fortescue Metals Group Ltd., Australia’s third-biggest iron ore producer, gained the most in almost two months in Sydney trading after forecasting second- half shipments will rise as steelmakers’ demand recovers.

Fortescue rose 10 percent, the most since Dec. 10, to A$1.95. The Perth-based company may ship 17.6 million metric tons of iron ore in the six months to June 30, after exports in December quarter totaled 6.3 million tons, it said Jan. 30.

The iron ore market, which slumped as a global recession forced steelmakers to cut output, may have bottomed as Chinese demand recovers, Fortescue said last week. China, the world’s largest buyer of the steelmaking ingredient imported 6.2 percent more in December than November, according to the nation’s customs.

“This seems more of a relief rally than anything else,” Alex Passmore, head of metals and mining research at Patersons Securities Ltd. in Perth, said today by phone. “They got their results out early and there they seemed very transparent. It seems to be business as usual for Fortescue.”

Passmore has a “hold” rating for the company, which began production in May. Profit for the three months to Dec. 31 was A$607 million ($384 million), up 19 percent from the previous quarter, Fortescue said Jan 30.