Why Are FMG And RIO Up On ASX Today?


As the market participants are aware, the stock prices of the Australian iron ore miners are witnessing a rise. At the time of writing, Fortescue Metals Group (ASX: FMG) and Rio Tinto Limited (ASX: RIO) are trading in green as they are up by 7.753% and 4.513%, respectively. It seems like these stocks are following the broader index as, at the time of writing, S&P/ASX 300 Metals and Mining is up by 101.8 points or 2.59%. The rise in the prices of Australian iron ore miners is witnessed largely because the dam of Vale SA witnessed the sudden blast. There are expectations that this incident as well as because of the possible steps which might be taken by the company moving forward might lead to the supply shortages. As a result, the iron ore prices are witnessing an uptrend. 

Not so long ago, Fortescue Metals Group had come forward and made an announcement related to the quarterly production results for the September 2018 quarter. As per the release issued by the company, it witnessed shipments with regards to iron ore of 40.2 million tonnes in the September 2018 quarter while cash production costs or C1 stood at US$13.19 per wmt (or wet metric tonne). The company stated that Q1 FY 2019 results showcases that there has been improvement with regards to realised price with the help of marketing as well as product strategy. Moreover, the company also witnessed sustained cost performance aiding it in terms of the robust cash flows. As per the release issued by the company, Fortescue Metals Group ended September 2018 quarter with cash on hand of US$972 million and it had net debt amounting to US$3.0 billion.

Coming to Rio Tinto Limited, the company had recently published the production results for the fourth quarter. According to the release given by the company, Rio Tinto Limited witnessed robust operational performance, especially throughout its copper assets. The company stated in FY 2018 it has been strengthening its asset portfolio and the company has been making deployments towards high quality growth. Talking about the operational update, Rio Tinto Limited posted 338 million tonnes of Pilbara iron ore shipments in FY 2018 which implies the rise of 2% on the YoY basis.

We would now be having a look at how Rio Tinto Limited and Fortescue Metals Group have been performing from the last few months. Rio Tinto Limited had posted the return of 3.83% in the time period of previous 6 months while in the span of previous 3 months, the company’s stock posted 11.82% return. However, in the period of previous one month, Rio Tinto Limited’s stock has given the return of 6.45%.

Fortescue Metals Group had generated the return of 28.97% in the span of previous three months while in the period of six months, the company’s stock had delivered the return of 15.37%. The annual dividend yield of Fortescue Metals Group stood at 4.57%. The market capitalisation of Fortescue Metals Group stood at $15.49 billion.


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