Fortescue Metals Group Ltd., the world’s fourth-largest iron ore exporter, said third-quarter shipments rose 28 percent as the biggest suppliers raise output and extend a seaborne surplus that sent prices to decade lows.
Shipments were 39.4 million metric tons in the three months ended March 31, from 30.8 million tons a year earlier, the Perth-based company said today in a statement. That beat the median estimate of 38.9 million tons from three analysts surveyed by Bloomberg.
The company’s shipping forecast for the full year was increased to between 160 million and 165 million tons, according to the statement. Fortescue rose 3.8 percent percent to A$1.925 at 1:15 p.m. in Sydney.
Iron ore last month completed its largest quarterly loss since at least 2009 as the biggest producers, including Fortescue and Rio Tinto Group, continue to expand supply, judging that increasing volumes will offset lower prices by forcing higher-cost competitors to shutter. Atlas Iron Ltd., Australia’s fourth-largest supplier, said last week it was reviewing operations amid the price collapse.
“The current state of the iron ore industry has been a disaster for everyone,” Chief Executive Officer Nev Power told reporters Thursday on a conference call. “It has ripped the heart out of the industry. There are absolutely no winners in any of this, only losers.”
The federal and Western Australian governments need to “have a hard look” at what has happened to the iron ore market, the most important issue in upcoming budgets and a key driver of the Australian economy, he said.
Andrew Forrest, the chairman and founder of Fortescue, last month called on competitors to work together to cap output, a notion described as “hare-brained” by Rio’s Chief Executive Officer Sam Walsh and dismissed by Gina Rinehart, the billionaire whose Roy Hill mine is scheduled to commence iron ore exports from Australia in September.
“We can’t understand any commercial logic in continuing to invest and expand,” Power said. Expanding to full capacity isn’t a “responsible thing to do in today’s market.”