Fortescue Metals Group Ltd., Australia’s third-biggest iron ore producer, said second-quarter shipments rose a better-than-expected 45 percent as the company expanded output.
Shipments were 14.4 million metric tons in the three months to Dec. 31, compared with 9.9 million tons a year earlier, Perth-based Fortescue said today in a statement. That compares with its guidance of 13.5 million to 14 million tons and RBC Capital Markets’ forecast of 14 million to 14.5 million tons.
Fortescue, controlled by Australia’s third-richest person Andrew Forrest, is spending $8.4 billion to almost triple its export capacity to 155 million tons a year. Over the next eight years, global supply needs to rise by at least 100 million tons each year to meet growing demand and replace operations with high production costs, according to Rio Tinto Group.
Fortescue rose 2.8 percent to A$4.75 at 11:52 a.m. in Sydney trading, compared with a 0.9 percent rise in the benchmark S&P 200/ASX Index.
Iron ore prices fell 19 percent during the quarter to average $141.27 a ton, according to data from The Steel Index Ltd. Any price above $100 a ton was “reasonable” and “sustainable,” Forrest said last month.
Fortescue’s average cost fell to $46.43 a ton, down from $49.78 a ton in the September quarter, the company said.