[ferro-alloys.com]Australia's Fortescue Metals Group said Thursday that it has trimmed the top end of its fiscal 2018-2019 (July-June) iron ore shipment guidance after being hit by tropical cyclone Veronica earlier in the year, which impacted Western Australian exports.

Following cuts in output guidance by giants BHP and Rio Tinto earlier in the week for the same reason, Fortescue is now expecting its fiscal year shipments to be between 165 million wet mt and 170 million wmt, down from its previous guidance of 165 million-173 million wmt.

"Closure of the Port Hedland port, combined with localized flooding in the area caused by tropical cyclone Veronica in late-March, resulted in the loss of five days of shipments equating to 2.5 million wmt," Fortescue's CEO Elizabeth Gaines said.

She also noted that C1 costs for the 12-month period are now expected to be in the range of $13-$13.5/wmt. Previously, they were expected to be towards the upper end of $12/wmt-$13/wmt.

"It's not surprising to see FMG impacted by weather in the Pilbara, given the announcements from peers BHP and Rio recently, surrounding the impact on their output for largely the same reasons," RBC Capital Markets' analyst Paul Hissey said.

Despite the weather issues, Gaines said the company performed well during the quarter.

"The Fortescue team has achieved an excellent result for the March quarter through a continued focus on optimizing product mix in a strong market, including the success of our 60.1% iron grade West Pilbara Fines product," she said.

FMG made its first shipment of the higher-grade product in December.

"Building on our integrated operations and marketing strategy, the sustained demand for our products combined with higher benchmark iron ore prices has seen our average realized price increase by 47% to $71/dry mt, compared to $48/dmt in the December quarter," Gaines said.

"Long term contracts for offtake of our 60.1% iron grade West Pilbara Fines product have now been finalized with nine customers, accounting for the majority of the product," she added.

Fortescue's total shipped tons of iron ore during the January-March quarter was 38.3 million wmt, which was down 10% from 42.5 million wmt in the October-December quarter, and 5% from 40.2 million wmt in the July-September quarter, it said.

West Pilbara Fines accounted for 3.8 million wmt, it said.

RBC had forecast the quarterly shipments to be 40.5 million wmt, Hissey said. JP Morgan said in a research note Thursday that it had forecast 41.8 million wmt.

Meanwhile, the 48 million wmt of ore Fortescue mined during the quarter, beat both RBC's and JP Morgan's forecasts of 44.7 million wmt and 46 million wmt, respectively.

(S&P Global Platts)

• [Editor:王可]