Fortescue shares experienced a downturn, ranking among the ASX 200’s weakest performers, following analyst evaluations of its December production update. The update revealed some setbacks at Iron Bridge and elevated hematite costs. Fortescue is an Australian metals and mining company. Its primary focus is on iron ore extraction and export.
RBC Capital Markets analyst Kaan Peker highlighted that investor apprehension centred on near-term cash flow, rather than overall volumes. Reduced Iron Bridge shipments have intensified doubts about the project’s capacity to meet FY26 guidance. Peker noted that the first-half performance indicated Iron Bridge was not on track to meet its full-year targets, heightening market scepticism about its timing and dependability.
Peker also pointed to increased hematite unit costs as a potential issue, suggesting that Fortescue may have prioritised higher-cost tonnes to capitalise on robust iron ore prices, rather than indicating a broader structural cost increase. While the December quarter was marginally weaker than expected, the company maintained its existing guidance.
Despite the softer quarter, the unchanged guidance, according to Peker, preserved longer-term credibility. Fortescue benefits from strong iron ore prices, which counteracted lower volumes and cost pressures. This allowed the company to maintain solid realisations and avoid any revision to its full-year guidance. At close of market, shares had declined by 4.6 per cent.
