SYDNEY, July 25 (Xinhua) — Australian mining giant Fortescue metals has revealed that it intends to take advantage of robust iron ore prices and strengthen ties with China to target record output over the coming year.
In a report released on Thursday, Fortescue said that shipments of iron ore had peaked in the past quarter at 46.6 million tons, due to Chinese steel mills focusing on optimizing raw material costs in response to lower steel margins.
Making up for lower productivity earlier in the year, the result took total shipments to 167.7 million tons for the financial year, just shy of 170 million tons the year before.
The company also said in the report that it had recently established a wholly owned Chinese sales entity, allowing the direct sale of products to Chinese customers in renminbi rather than U.S. dollars.
“Fortescue has recently established a new wholly owned sales entity in China to support our customers through direct supply from regional Chinese ports, providing customers with an option to purchase smaller volumes, in Renminbi,” Fortescue Chief Executive Officer Elizabeth Gaines said.
“This entity will complement our existing contractual seaborne arrangements with our first renminbi transactions completed in June 2019.”
While Fortescue shares have more than doubled in the past six months, they have softened over the past few days amid expectations that the price of iron ore may have peaked.