Sydney, Jan 25, 2026, 17:07 AEDT — Market closed
Fortescue Ltd (FMG.AX) ended Friday at A$21.51, edging up 0.14%. The slight rise followed a steep 5.12% fall the day before, which sparked fresh scrutiny of its cost structure. 1
Jefferies trimmed its price target for the miner slightly, from A$18.5 down to A$18.4, while keeping an “underperform” rating. The firm pointed out that unit costs reached $19.1 a wet tonne, about 6% above consensus, even though the strip ratio—the waste rock moved per tonne of ore—was lower. Jefferies also flagged that any savings from hauling less waste might take time to show up in reported numbers, since the C1 cost line reflects cost of sales. 2
The ASX cash market is closed Monday, Jan. 26, for Australia Day, so trading resumes Tuesday. Iron ore drew attention before the open. On Friday, futures in China and Singapore ticked up after six straight sessions down. The Dalian May contract rose 1.21% to 795 yuan a tonne, and Singapore’s February contract climbed 0.97% to $104.65. 3
Fortescue shipped 50.5 million tonnes (Mt) in the December quarter, pushing first-half volumes to a record 100.2 Mt. Hematite C1 unit costs rose to US$19.10 per wet metric tonne, including moisture. The company stuck to its fiscal 2026 guidance, forecasting shipments between 195 and 205 Mt and hematite costs of US$17.50–US$18.50/wmt. The cost increase stemmed mainly from inventory timing, higher diesel prices, and the AUD/USD exchange rate. As of Dec. 31, Fortescue reported a cash balance of US$4.7 billion and net debt of US$1.0 billion. 4
On the investor call, CFO Apple Paget stressed that C1 is a cost-of-sales metric influenced by inventory and timing shifts. She said, “we have every confidence that we will be within our guided range.” For the first half, hematite C1 costs stood at US$18.64/wmt. Iron ore projects director Graham Howard also reiterated the company’s “committed” outlook for shipping 10–12 Mt from Iron Bridge this year.
Traders wrestle with a familiar puzzle: iron ore prices take the hit, and Fortescue’s slice of the profits hinges on its cost management.
The downside is clear. A further fall in iron ore prices, or if expenses such as diesel, freight, currency fluctuations, or ramp-up challenges exceed expectations, margins will suffer, leaving brokers wary.
BHP and Rio Tinto usually move in step with commodity trends, but Fortescue, which targets lower-grade ore, feels the pinch more sharply when discounts on those grades expand. Changes in China’s restocking versus production cuts over the Lunar New Year can swiftly flip market sentiment.
Fortescue’s half-year results land on Feb. 25, followed by the March-quarter production update on April 23. Investors will watch these dates closely for insights into costs, Iron Bridge output, and cash management. 5
