December 5, 2008 - 9:55AM
Iron ore miner Fortescue Metals Group has suspended contracts on about two-thirds of its ore shipments, in an effort to switch to greater reliance on deals that require the buyer to freight the product.
Fortescue said on Friday that it was suspending all long term shipping contracts of affreightment and consecutive voyage contracts.
This would not affect marketing or total volumes, the miner said, rather the mix of sales between the suspended contracts and the other major form of shipment, FOB (freight on board).
The suspended contracts require Fortescue to supply ore on a landed basis into China. FOB contracts require the buyer to arrange shipment from Fortescue's facility in Port Hedland, in the north of Western Australia.
Fortescue didn't explain the reason behind the move, other than to say it was ``on the basis of unforeseen circumstances''.
The move comes, however, amid a downturn in the steel business globally, particularly in Fortescue's key market, China, with many steel producers seeking to amend, delay or suspend shipments from Australian ore miners.
Contracts involving Fortescue paying for shipments into China that remain on the docks would present different cost implications to deals that involve ore sitting in Fortescue's stockpiles in WA.
"Fortescue ... advises that consistent with the continued prudent management of its business and in reflection of changed operating conditions, it has exercised suspension of all of its long term CFR shipping Contracts of Affreightment and Consecutive Voyage Contracts,'' Fortescue told the ASX.
"The changed arrangements as a result of these suspensions, should not affect Fortescue's marketing program in regards to volumes of product shipped, just the split between CFR and FOB sales terms.
"To date, approximately 2/3 of Fortescue's sales have been on CFR terms but this is likely to reduce to around 1/3rd of sales...
"The changed arrangements are in direct response to market conditions demanding greater FOB sales,'' Fortescue said.
AAP
- Forums
- ASX - By Stock
- FMG
- fortescue suspends shipping contracts
fortescue suspends shipping contracts
-
- There are more pages in this discussion • 33 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
Add FMG (ASX) to my watchlist
|
|||||
Last
$21.71 |
Change
-0.190(0.87%) |
Mkt cap ! $66.84B |
Open | High | Low | Value | Volume |
$21.77 | $21.80 | $21.34 | $408.6M | 18.51M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
2 | 289875 | $21.68 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$21.72 | 95078 | 4 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
1 | 284888 | 21.680 |
1 | 1 | 21.660 |
1 | 200 | 21.630 |
4 | 179699 | 21.620 |
5 | 124544 | 21.610 |
Price($) | Vol. | No. |
---|---|---|
21.720 | 72320 | 2 |
21.730 | 12341 | 3 |
21.740 | 234670 | 3 |
21.750 | 66245 | 8 |
21.760 | 16520 | 2 |
Last trade - 16.10pm 21/06/2024 (20 minute delay) ? |
Featured News
FMG (ASX) Chart |
The Watchlist
FHE
FRONTIER ENERGY LIMITED
Adam Kiley, CEO
Adam Kiley
CEO
SPONSORED BY The Market Online