Fortescue shares hit 16-month low as Q1 iron ore shipments miss estimates

Fortescue shares plummeted to their lowest level in 16 months on Thursday, after the mining company's first-quarter iron ore shipments fell short of analysts' expectations. The miner's shipments totaled 46.8 million tonnes, a 6% decrease from the previous year, and fell 3.9 million tonnes below the 47.5 million tonne consensus estimate.

This drop in shipments came amid scheduled port maintenance and ongoing talks with China's state-backed iron ore buyer. Fortescue's shares slipped 4.2% to A$14.62, falling behind the S&P/ASX 200's 0.5% decline. The company's product inventories were expected to rise by another 4 million to 5 million tonnes by October, as it continues to fine-tune its sales channels.

However, Fortescue warned that its operations could be impacted if negotiations with the Chinese buyer were not concluded by the end of the year, potentially leading to production adjustments. The miner's hematite C1 unit costs rose 21% year-over-year to US$21.98 per wet metric tonne, driven by inflationary pressures, reduced supply-chain volumes, and higher diesel prices.

The realized hematite price decreased 10% year-over-year to US$79.79 per dry metric tonne. Despite these challenges, Fortescue kept its fiscal 2027 shipment guidance between 197 million and 207 million tonnes, and its hematite C1 cost guidance between US$20.50 and US$21.75 per tonne.