By Jaskiran Singh
(Reuters) -Australia's Fortescue Metals Group (OTC:FSUGY) reported a 4.2% rise in first-quarter iron ore shipments on Thursday, boosted by higher production at its key operations in Western Australia, and said rising prices of diesel and labour bumped up costs.
The production report from the world's No.4 iron ore miner came against the backdrop of sliding prices of the steel-making commodity as top consumer China's strict COVID-19 curbs and under-pressure property sector have slammed its economy.
Last week, rival Rio Tinto (NYSE:RIO) forecast annual iron ore shipments at the lower end of its earlier forecast, while BHP said it expected macro-economic uncertainties to continue to affect supply chains, energy costs and labour markets in the short term.
Iron ore prices are on track to end 2022 at their lowest in the last three or four years and are expected to remain weakened next year too, a Reuters survey showed earlier this month.
Fortescue shipped 47.5 million tonnes (mt) of iron ore in the quarter ended September, compared with 45.6 mt a year earlier. RBC Capital Markets analyst Kaan Peker said the quarterly result was broadly in line with the brokerage's estimates.
However, the miner's direct costs jumped 16% to $17.69 per wet metric tonne (wmt).
The company kept its full-year guidance unchanged, expecting to ship between 187 mt and 192 mt of ore in fiscal 2023.
The miner said its Iron Bridge project would deliver 22 mt per annum of high grade magnetite concentrate, with first production scheduled for the March 2023 quarter, and reaffirmed its cost estimate at between $3.6 billion and $3.8 billion.
Fortescue's shares inched up 0.8% to A$16.26 by 2327 GMT, while the broader market rose 0.3%.