Published by Global Banking & Finance Review®
Posted on January 21, 2026
3 min readLast updated: January 22, 2026
Add as preferred source on GoogleFortescue's Q2 iron ore shipments rose 2%, driven by Iron Bridge project and hematite operations, exceeding estimates with 50.5 Mt shipped.
By Melanie Burton and Rajasik Mukherjee
MELBOURNE, Jan 22 (Reuters) - Australia's Fortescue is deepening its ties to China and buying more equipment from its top customer, part of the reason its iron ore is flowing uninterrupted to the country, CEO Dino Otranto said on Thursday.
China Mineral Resources Group (CMRG), which buys iron ore on behalf of more than half of China's steel mills, has meanwhile restricted domestic steel mills from purchasing some shipments from rival BHP in the midst of 2026 contract talks.
That strategy has stoked industry concerns over China's dominance in many commodity markets, where it leverages volume to argue for better terms.
To help ensure its iron ore exports keep flowing, Fortescue has bolstered its senior leadership in China and purchases of battery electric storage, solar panels and wind turbines from Chinese companies, Otranto told a results call, including from electric vehicle maker BYD .
"The relationship with Chinese customers has to evolve to a much more comprehensive ... relationship, and I think we're seeing now the fruits of that, so our volume still flows when the market ebbs and flows," he said.
Otranto said that while ties with China were much broader than simple transactions of iron ore, it was still having "robust" conversations with CMRG over supply.
"Notwithstanding that, it's critically important for us as we enter into very, very robust, very strong conversations with CMRG. We believe in a free capital market system, which in many cases, having aggregated buying groups somewhat flies in the face of that."
RECORD FIRST-HALF OUTPUT
Fortescue reported record first-half production on Thursday on upbeat performance from its hematite operations, while also logging a rise in costs that sent its shares down nearly 4%.
First-half production from its Iron Bridge magnetite mine, however, suggested the project may not meet its annual target.
The world's fourth-largest iron ore miner shipped 50.5 million metric tons of the steelmaking commodity in the three months ended on December 31, compared with 49.4 million tons shipped a year earlier, just beating a Visible Alpha consensus estimate of 50.3 million tons.
Its C1 unit cost of hematite iron ore rose 5% from the previous quarter to $19.10 a wet metric ton during the quarter, reflecting higher diesel prices, exchange rate fluctuations and the normalisation of inventory impacts that had benefited the prior quarter.
Those higher costs hit stocks, said Ben Richards, portfolio manager at Seneca Financial Solutions.
Shares fell as much as 3.6% on Thursday to A$21.380.
Shipments of high-grade ore from Iron Bridge rose 44% from last year to 2.2 million tons during the quarter. For the half-year, Iron Bridge shipped 4.3 million tons, suggesting the project may struggle to meet its full-year forecast of 10 million to 12 million tons.
"Production and shipments continued to miss expectations through the ramp-up of operations, and continue to indicate struggles with the plant," said Jefferies in a note.
The Perth-headquartered firm kept its forecasts for fiscal 2026 shipments, unit costs and capital expenditures unchanged. It will report half-year results on February 25.
(Reporting by Melanie Burton in Melbourne and Rajasik Mukherjee in Bengaluru; Additional reporting by Nikita Maria Jino in Bengaluru; Editing by Alan Barona and Tom Hogue)
Iron ore is a mineral from which iron can be extracted. It is a key raw material for steel production, making it essential for various industries.
A mining operation refers to the process of extracting valuable minerals or other geological materials from the earth. This includes various activities such as exploration, extraction, and processing.
Hematite is a common iron oxide mineral that is a primary source of iron ore. It is known for its metallic luster and reddish color.
Investment in the mining sector involves allocating capital to companies or projects that extract minerals and resources. This can include purchasing stocks, bonds, or direct investment in mining operations.
Overall shipment statistics refer to the total quantities of goods transported over a specific period. In mining, it typically indicates the volume of minerals shipped to customers.
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