Fortescue lower despite a record quarter
Stock
Fortescue (FMG) $4.41 as at 26/07/2018Event
Fortescue was supported earlier in the day, before buying dried up and shares sunk despite what we view as a reasonable quarterly report. It was another record quarter to round out the financial year, Fortescue shipped 46.5Mt of iron ore, and kept costs under wraps at an average of $US12.47/t average over the year. What we found most promising was the slight uptick in realized price vs. the iron ore price – a 37% discount to the normal 62% iron ore price index. The improvement to last quarter justifies our view that this is a cyclical trend and the lower quality ore that FMG produces will not be priced out of the market.
All in all, production, cost and price guidance was all inline, and we see FMG as a viable iron ore player long term.
Fortescue (FMG) Chart
