Australian (ASX) Stock Market Forum

FMG - Fortescue Ltd

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There is a lot of disruptive news in the markets with IO prices ATM, but the IO price is holding on fairly well.

FMG saw another fall with their SP, but it is still not touched by a great deal of shorters to my surprise. Maybe an entry point for newcomers at the lower SPs.

The US presidential elections with the possible entry of Trump has sent much fear into the markets. Another thing to see is how effectively Trump delivers the trade embargoes if he gets into office. Many economic analysts expect the US inflation to increase to high numbers with the entry of Trump.

The FMG Sept quarterly result wasn't received too well by some, but one must expect the ups and downs of any commodity driven company.

( still holding)



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FMG released its Quarterly report last week. Looked good

Record first quarter shipments in strong start to FY25

Summary
• Group Total Recordable Injury Frequency Rate (TRIFR) of 1.2 at 30 September 2024, 29 per cent lower than 1.7 at 30 September 2023.

• Total iron ore shipments of 47.7 million tonnes (Mt) in Q1 FY25, four per cent higher than Q1 FY24 and a record for a first quarter; this included 1.6Mt from Iron Bridge.

• Hematite C1 cost of US$20.16/wet metric tonne (wmt) was up 12 per cent on Q1 FY24, impacted by a higher strip ratio in the quarter and inflationary pressures.

• Hematite average revenue of US$83/dry metric tonne (dmt) for the quarter, realising 83 per cent of the average Platts 62% CFR Index.

•Iron Bridge Concentrate revenue of US$111/dmt was 97 per cent of the average Platts 65% CFR Index.

•Cash of US$3.4 billion and net debt of US$2.1 billion at 30 September 2024 after payment of the FY24 final dividend of US$1.9 billion and capital expenditure of US$0.8 billion in the quarter.

•Signed a US$2.8 billion partnership with Liebherr to jointly develop and validate a range of zero emission mining solutions, this includes the supply of battery power systems by Fortescue Zero.

•Works commenced on the Green Metal Project at Christmas Creek.

•Celebrated significant milestone of the Billion Opportunities program awarding more than A$5 billion in contracts and sub-contracts to First Nations businesses, since inception.

•Released an externally verified Climate Transition Plan to reach Real Zero by 2030.

•Fortescue’s Board has elected Dr Larry Marshall as the new Lead Independent Director, effective from the Company’s 2024 Annual General Meeting.

•Guidance for FY25 shipments, C1 cost and capital expenditure remains unchanged.

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September 2024 Quarterly Production Report (PDF 285.0 KB)
 
FMG Fortescue metals my No 1 pick in the Comp
Up a bit on last month's finish, but I still am a strong believer in Twiggy and his company.
Certainly good buying at this price whilst under $20.
While Twiggy makes truckloads of profit so do the peasants in proportion.
 
A warning about the future of Iron Ore mining in Australia from FMG CEO - and why green steel production needs a super kick along

Australia risks losing its iron ore dominance, Fortescue CEO says​

By Melanie Burton
October 29, 20245:28 PM GMT+11Updated 12 days ago


  • Summary
  • Companies
  • Australia faces competition from Guinea mine, green iron projects
  • Tough lesson in Australia's nickel industry collapse
  • Fortescue presses for more government, industry collaboration
Oct 29 (Reuters) - Australia risks losing its dominant position in the global iron ore market if it does not move swiftly to produce green iron, and would do well to learn lessons from the near wipe-out of its nickel industry, Fortescue CEO Dino Otranto said on Tuesday.

Australia is the world's biggest supplier of seaborne iron ore, accounting for around half of global supply. But the Pilbara grades dug up from the country's west are generally regarded as too low to be turned into steel without using coal.

That means as steel makers decarbonise, they are turning elsewhere for iron ore, which could hit Australia's top export earner, Otranto said at the IMARC conference in Sydney.

 
basilio said:
A warning about the future of Iron Ore mining in Australia from FMG CEO - and why green steel production needs a super kick along

Australia risks losing its iron ore dominance, Fortescue CEO says​

By Melanie Burton
October 29, 20245:28 PM GMT+11Updated 12 days ago


  • Summary
  • Companies
  • Australia faces competition from Guinea mine, green iron projects
  • Tough lesson in Australia's nickel industry collapse
  • Fortescue presses for more government, industry collaboration
Oct 29 (Reuters) - Australia risks losing its dominant position in the global iron ore market if it does not move swiftly to produce green iron, and would do well to learn lessons from the near wipe-out of its nickel industry, Fortescue CEO Dino Otranto said on Tuesday.

Australia is the world's biggest supplier of seaborne iron ore, accounting for around half of global supply. But the Pilbara grades dug up from the country's west are generally regarded as too low to be turned into steel without using coal.

That means as steel makers decarbonise, they are turning elsewhere for iron ore, which could hit Australia's top export earner, Otranto said at the IMARC conference in Sydney.

Click to expand...
EU is the only one prepared to penalise for carbon emissions, Trump already said he would can net zero, and Dutton wants to follow.
 
Very interesting price action towards the end of the week with respect to iron ore, which flowed through to Fortescue (FMG) as well as the ASX 200 Materials index (XMJ) overall. Following on from the bullish potential that was detected for FMG on the Thursday (see first chart below - daily chart), a 15 minute 'squeeze play' formed on Friday afternoon for FMG as iron ore activity picked up (see second chart below). This 'squeeze play' was enough to take the daily closing price above the 30 day moving average of $18.78 and the volume profile area of $18.87 on the daily chart by the end of the week. Should momentum continue, potential share price targets include $20.13 and $21.26, which are former volume profile areas and resistance areas.

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I picked up a whole bunch of FMG shares today in my SMSF. For me, this is a definite value play at these prices.

Shares are currently trading at $19.43 per share.

At current prices, FMG is trading at 7x earnings and has a current earnings yield of 13.95% using earnings from the 2024 AR. Implied growth rate of the business at these levels is -0.67%!

Bargain.

Revenues up 8% YoY and net profit up 18% YoY as well.

Balance sheet continues to provide great signs. The business has enough cash and cash equivalents to cover all current liabilities and have $2.2B in C&CE left over. Given the C&CE portion of the balance sheet covers short term debt, this leaves the long-term debt to equity ratio at a measly 0.47x. Perfect.

Company is also free cash flow positive with annual free cash flows in 2024 of $5.085B.

More than happy to hold for my 15.29% dividend return (including franking credits) plus capital growth.

I'm in with circa 2500 shares.
 
qldfrog said:
Search failing currently so using FMG as io proxy
Potentially a trend mover if lower quality io can be used by China
www.scmp.com

China’s ‘explosive’ ironmaking breakthrough achieves 3,600-fold speed boost

A new method for making iron is not only faster and cheaper, but also better for the environment, according to Chinese researchers.
www.scmp.com www.scmp.com
Click to expand...
Good morning @qldfrog
most interesting article, cannot view in entirety, are you able to cut and paste the article please?

Kind regards
rcw1
 

China’s ‘explosive’ ironmaking breakthrough achieves 3,600-fold productivity boost​

A new method for making iron is not only faster and cheaper, but also better for the environment, according to Chinese researchers
Stephen Chenin Beijing
Published: 12:00pm, 8 Dec 2024Updated: 2:43pm, 8 Dec 2024

After more than a decade of intensive research in China, a new ironmaking technology is poised to revolutionise the global steel manufacturing industry.
The method involves injecting finely ground iron ore powder into an extremely hot furnace, triggering an “explosive chemical reaction”, according to the engineers involved in the project.
The result is a display of bright red, glowing liquid iron droplets that rain down and collect at the bottom of the furnace, forming a stream of high-purity iron that can be directly used for casting or “one-step steelmaking”.

Known as flash ironmaking, the method “can complete the ironmaking process in just three to six seconds, compared to the five to six hours required by traditional blast furnaces”, wrote the project team led by Professor Zhang Wenhai, an academician of the prestigious Chinese Academy of Engineering, in a paper published in the peer-reviewed journal Nonferrous Metals in November.
This equates to a 3,600-fold or more increase in the speed of ironmaking. The new method also works exceptionally well for low or medium-yield ores that are abundant in China, according to the researchers.
Existing iron production methods depend heavily on high-yield ores, and China spends a huge amount of money importing these ores from Australia, Brazil and Africa.
According to calculations by Zhang and his colleagues, the new technology could improve the energy use efficiency of China’s steel industry by more than one-third. As it eliminates the need for coal entirely, it would also enable the steel industry to achieve the coveted goal of “near-zero carbon dioxide emissions”, Zhang’s team added.​

Click to expand...
 
rcw1 said:
Good morning @qldfrog
most interesting article, cannot view in entirety, are you able to cut and paste the article please?

Kind regards
rcw1
Click to expand...
Funny, was able to read the lot initially, but not anymore, probably as you now😬
Thanks @TimeISmoney;
Interesting isn't it, that and pulverised coal to replace coking coal:
China does not need anymore to import either our iron or coal..of course, they will carry on the old process..as long as cheaper..but we do not hold them by the balls..
 
qldfrog said:
Funny, was able to read the lot initially, but not anymore, probably as you now😬
Thanks @TimeISmoney;
Interesting isn't it, that and pulverised coal to replace coking coal:
China does not need anymore to import either our iron or coal..of course, they will carry on the old process..as long as cheaper..but we do not hold them by the balls..
Click to expand...
Why do you think they don’t need our iron ore?

Even if they could use their lower grade ores, they still don’t produce the required tonnage, not to mention that their “abundant low grade ores” are located far away from the steel mills which sit on the coast.

It’s going to continue to be much cheaper to use higher grade ores coming in by ship for a long time.

Not only is it more expensive to ship a tonne of ore over land vs by ship, but if you are using 30% grade you need to ship 2 tonnes to be equal to 1 tonne of high grade, plus you have all that waste slag to deal with,
 
Twiggy is pro China, FMG will be the last IO company to lose exports to China, not impossible but unlikely at this stage.
FMG and China have also collaborated on building green steel, which the EU will most likely use.

There's a good chance that China will end up printing more money to keep the domestic market going as it is in competition with the US.
 

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