Fortescue Metals Group Ltd. said March 27 that it updated its iron ore price guidance for its fiscal 2018 ending June 30 to approximately 65% of the average benchmark Platts 62 CFR index.
The adjustment was due to a slowdown in Chinese construction, the continued reduction of steel production in Chinese mills and the potential impact of global trade tensions in the wake of U.S. tariffs on steel and aluminum imports.
The first-half revenue realization for fiscal 2018 was 68% of the average Platts 62 CFR Index. The Australian iron ore miner realized US$56 per dry tonne, based on the 62 CFR Platts Index of US$65 per dry tonne in the first half of its fiscal 2018.
Price realization as a percentage of the Platts 62 CFR index is expected to increase as market conditions become steady. "This view is supported by an expectation of strengthened demand for lower iron content ores as steel mill margins moderate and end users look to lower their raw material input costs," the company said.
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