Fortescue upbeat on iron ore price
Speaking after Fortescue published its results for the September quarter, Mr Power said low iron ore inventories in China would not allow the price to fall dramatically in the near future, as some pundits had predicted.
Many observers tipped the iron ore price to fall in August-October period, just as it did in the past two years. UBS has forecast a flash slump to $US70 a tonne before October 31, based on the traditional time of year that Chinese steel makers wind back production.
But so far there has been no slump, with the benchmark price averaging a healthy $US133 a tonne in the September quarter.
Mr Power said he believed price movements were mostly driven by the size of stockpiles in China.
The 25.9 million tonnes exported during the September quarter keeps Fortescue on track to meet its full-year export guidance of between 127 million and 133 million tonnes, but was lower than some analysts had hoped for. Costs were also within the guided range.
Frequently Asked Questions about this Article…
Fortescue Metals is optimistic about the iron ore price because of low iron ore inventories in China, which are expected to prevent a dramatic price fall in the near future.
Fortescue Metals reported that they exported 25.9 million tonnes of iron ore during the September quarter, keeping them on track to meet their full-year export guidance of between 127 million and 133 million tonnes.
In the September quarter, the benchmark iron ore price averaged a healthy $US133 a tonne, defying predictions of a slump.
Fortescue Metals believes that iron ore price movements are mostly driven by the size of stockpiles in China.
UBS forecasted a flash slump in the iron ore price to $US70 a tonne before October 31, based on the traditional time of year when Chinese steel makers reduce production.
No, the iron ore price did not slump as predicted in the August-October period; instead, it maintained a strong average of $US133 a tonne in the September quarter.
Yes, Fortescue Metals is on track to meet its full-year export guidance of between 127 million and 133 million tonnes, despite the September quarter exports being lower than some analysts had hoped for.
Low iron ore inventories in China are significant because they are expected to prevent a dramatic fall in iron ore prices, supporting a more stable market.
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