Fortescue Second-Quarter Iron Ore Shipments Miss Estimates

Jan 30, 2014 1:07 am ET

(Updates with CEO comment in third paragraph.)

Jan. 30 (Bloomberg) -- Fortescue Metals Group Ltd., Australia’s third-biggest iron ore exporter, missed analysts’ quarterly estimates after wet weather disrupted operations.

Shipments were 26.7 million metric tons in the three months ended Dec. 31, from 19.1 million tons a year earlier, the Perth- based company said today in a statement. That compares with the median estimate of 29.4 million tons from six analysts surveyed by Bloomberg.

Demand for the steelmaking raw material will continue to remain “strong,” Chief Executive Officer Neville Power said on a call with reporters. Prices are expected to range between $110 to $130 a ton for the next one to two years, he said.

Shipments for the year ending June 30 are estimated at 127 million tons, toward the lower end of a previous forecast, partly as a result of disruption from bad weather at its operations in Australia’s Pilbara region, Fortescue said.

Fortescue is accelerating early repayment of bonds to help cut debt ahead of a forecast decline in iron ore. Average prices are predicted to drop until at least 2017 after miners including Fortescue and Rio Tinto Group, Australia’s biggest exporter, built new mines to supply rising demand from China.

The company’s shares fell 1.3 percent to A$5.23 at the close in Sydney. Since the start of the year, iron ore prices in China have declined 8.6 percent to $122.60 a ton yesterday.

--Editors: Andrew Hobbs, Abhay Singh