Fortescue chief executive Nev Power. Picture: Michael O Brien/The West Australian.
Fortescue chief executive Nev Power. Picture: Michael O'Brien/The West Australian.

UPDATE 2.20pm: Fortescue Metals Group received only an average of $US82/t for its ore in the fourth quarter of the year, with the company attributing the iron ore price plunge to a 30 per cent increase in supply from the Pilbara.

Fortescue said last week its average realised price per tonne for the 2013/14 financial year was $US106.

That fell sharply in the final quarter of the year, with the company receiving only 80 per cent of the average benchmark price for 62 per cent ore, compared to an average 86 per cent of the benchmark price through the full year.

Fortescue chief executive Nev Power said he expected that gap to narrow in coming months as high cost domestic Chinese supply left the market, and prices began to rebalance.

Although Fortescue missed its ambitious quarterly production guidance "stretch target" of 41.6mt, shipping only 38.7mt because of handling issues at the port end, Mr Power still lauded the company's performance.

The company said it had achieved its 155mt annualised run rate in the June quarter and a record 160mt annualised run rate for the month of June.

Fortescue's costs for the quarter came in below expectations, at $US34/t cash costs and $US52/t delivered.

FMG held cash on hand of $US2.4 billion at the end of the quarter and net debt of $US7.2 billion.

Shares in the company were up 27 cents, or 6.27 per cent, to $4.58 at the close.

The West Australian

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