Fortescue is trending up on the ASX following the release of its September quarterly which showed middle-of-the-road results for the miner. So what’s behind the spike in share price?
Fortescue shipped 45.9 million tonnes (Mt) of iron ore in the first quarter of the 2024 financial year (Q1 FY24), three per cent lower than the corresponding period last year.
The direct cost of iron ore production was $US17.93 per wet metric tonnes, one per cent higher than Q1 FY23. Fortescue netted an average revenue of $US100 per dry metric tonne (dmt) of hematite iron ore from its Pilbara operations.
The company also celebrated first operational production at the Iron Bridge magnetite mine in August. The mine produced magnetite concentrate revenue at an average of $US131 per dmt.
The quarter left Fortescue with a cash balance of $US3.1 billion and net debt of $2.2 billion after a $2 billion dividend.
After the announcement on Thursday morning, Fortescue’s share priced dipped just shy of one per cent. But the end of the day told a different story, with shares up as much as 3.2 per cent.
Industry analysts have pointed the finger at a sudden lift in iron ore prices, which is currently trading around $US120.50 per tonne. A contributing factor of this is solid demand from China, Australia’s top iron ore export market, where blast furnace steel production is proving an insatiable destination for iron ore. Indeed, BHP and Rio Tinto are also enjoying a lift in share price since Thursday, suggesting that the picture may be bigger than Fortescue alone.
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