The Fortescue Metals Group Limited (ASX: FMG) share price has fallen more than 4% after the release of its June 2019 quarter report.
Fortescue Metals Group or FMG is a global leader in the iron ore industry, known for its leading development of world class infrastructure and mining assets in the Pilbara region of Western Australia. Fortescue was founded in 2003 by Andrew Forrest, who is now one of Australia’s wealthiest people. The vast majority of Fortescue’s iron ore, a steel-making ingredient, is shipped and sold to Chinese customers.
Fortescue’s Fantastic June 2019 Quarter
The iron ore miner reported that it produced a record quarterly shipment of 46.6 million tonnes (mt) for June 2019, including 4.7mt of West Pilbara ‘Fines’.
This final quarter brought total FY19 shipments to 167.7 mt, which was 1% lower than FY18 due to the impact of Cyclone Veronica.
Fortescue reported that the average revenue received increased by 30% to US$92 per dry metric tonne (tonne) from US$71 per dmt in the March 2019. In other words, Fortescue really raked it in with that last quarter, and Australia is benefiting too despite the ongoing trade war.
Fortescue’s cash production costs (‘C1’) were US$12.78 per wet metric tonne (wmt).
Other Fortescue News
During the quarter was the official opening of the Judith Street Harbour in Port Hedland marking the completion of Fortescue’s towage infrastructure and supply chain.
In the June 2019 quarter was the approval of the US$287 million investment in the Queens Valley mining area development at the Solomon Hub.
Management also said that the Eliwana Mine and Rail and Iron Bridge Magnetite projects are progressing on schedule and on budget.
Fortescue CEO Elizabeth Gaines said: “The Fortescue team has achieved exceptional results across safety, production, costs and delivery of our product strategy in the June Quarter.”
Is Fortescue A Buy Today?
Fortescue is having a great time at the moment, it’s really cashing in on the strong iron ore prices.
However, even if the dividends are good at the moment, I’m not sure if it would be the right call to buy shares of Fortescue when this could be the top of the cycle. It would be better to wait until the iron ore price is lower again.
Until then, it might be a much better idea to invest in the shares of the quality businesses below.
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