FMG sees ore price stabilising
UPDATE 2.50pm: Fortescue Metals Group says it sees the price of iron ore stabilising as higher cost production leaves the market.
The Pilbara-focused miner said iron ore prices had declined in the June quarter as a result of volatility driven by significant new supply entering the market.
"Fortescue expects the iron ore market to re-balance in the short term as higher cost production leaves the market flattening the global cost curve and stabilising the price," the company said in a statement.
The falling iron ore price in recent months has been a growing concern for iron ore miners, particularly those in the higher cost bracket which struggle to break even when the price of the commodity falls below $US100 a tonne.
The iron ore spot price was $US96.90 a tonne yesterday. Analysts expect the price might tick up above $US100 a tonne in the next few weeks as supply tightens.
The Pilbara iron ore miner also announced this morning it had achieved an annualised run rate of 160 million tonnes last month.
Over the 2014 financial year, the company reported it had shipped 124.2 million tonnes at an average price of $US106 per dry metric tonne, generating revenues of about $11.4 billion.
The 124.4 million tonne annual production figure missed the miner's previous guidance of 127 million tonnes for the 2013/14 year.
The miss can partly be attributed to heavy rainfall in the Pilbara in January which slowed its operations and delayed shipping movements.
Fortescue said it would continue to focus on costs in a bid to move down the global cost curve.
Chief executive Nev Power said Fortescue's latest record quarter was an outstanding end to the year.
"The accelerated rapid ramp up to a sustained 155mtpa rate for the June quarter highlights the outstanding achievements and commitment of everyone at Fortescue," he said.
Fortescue shares closed down one cent at $4.34.
