Fortescue Metals Group expects the iron ore price to stabilise at around $US120 per tonne as stimulus in China generates increased demand for steel.
The iron ore miner said its average cost including freight for the September Quarter was $US98 per dry tonne (dt), reflecting the decrease in global iron ore prices.
Fortescue said it recorded an annualised shipping rate of more than 64 million tonnes during the quarter, ahead of guidance, despite disruption from maintenance and expansion activities.
During the quarter Fortescue shipped 16.1 million tonnes, up 30 per cent on the previous corresponding period (pcp).
"It is Fortescue's expectation that the 62 per cent iron index price will stabilise in the short term at approximately $US120 per tonne as the Chinese government prepares for its leadership transition in November and stimulus packages generate increased demand for steel and re-stocking at Chinese steel mills," Fortescue said.
While the market remained volatile due to the oversupply of steel and low steel prices, most industry analysts expect the iron ore price to stabilise at approximately $US120 per tonne based on the global cost curve and the supply demand balance, Fortescue said.
The company said cost guidance for fiscal 2013 remained at $US45 to $US50 per wet tonne.
Fortescue said it remained committed to completing its Kings mine at the Solomon hub in the Pilbara and expanding to 155 million tonnes per annum following the completion of the distribution process for the $US5.0 billion ($A4.90 billion) senior secured credit facility.Fortescue said it remained committed to completing its Kings mine and expanding to 155 million tonnes per annum following the completion of the distribution process for the $US5.0 billion ($A4.90 billion) senior secured credit facility.
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