Fortescue Metals Group chief executive officer Elizabeth Gaines is optimistic that China’s trade dispute with the United States will not dampen iron ore demand from China.
Speaking at the International Mining and Resources Conference (IMARC) in Melbourne yesterday, Gaines noted that exports of the raw steelmaking ingredient decreased by 30 per cent in 2017.
She said the majority of China’s steel is consumed domestically, with the US ranking 26th as China’s destination for steel exports, accounting just 1 per cent of annual exports.
China is Fortescue’s primary market, producing 50 per cent of world steel and representing 70 per cent of the global seaborne iron ore trade.
Gaines, instead, pointed to industry concerns surrounding the precariousness of the trade dispute.
“History has demonstrated that protracted periods of trade protectionism are not favourable for global growth, and like many in our sector, we are concerned about the impact of trade protectionism on global markets more broadly, particularly currencies and fuel prices,” Gaines said.
While she does not expect a weakened demand in the short-term, the company continues to drive down costs through innovation and automation.
Fortescue achieved an industry leading and record low direct cost of $US12.36 ($17.46) per wet metric ton this year. Gaines said this will continue to be maintained between $US12–13 in the 2019 financial year.
In April, Fortescue introduced autonomous haulage system (AHS) technology to the Chichester Hub in the Pilbara, making it the world’s first iron ore operation that operates a fully autonomous fleet.
“The Pilbara in Western Australia is home to three of the four lowest cost iron ore producers in the world as well as the world’s largest bulk export port in Port Hedland.
“So it is therefore critical for Australia and our economy that we remain internationally competitive,” Gaines said.