CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved.

BHP, RIO and FMG share prices: June quarter shipments preview

The iron ore market remains resilient, supply side issues persist and June quarter production results for Australia's big three miners loom.

BHP, RIO and FMG Source: Bloomberg

With Australia’s big three miners – Rio Tinto (RIO), BHP Group (BHP) and Fortescue Metals Group (FMG) – all set to report their June quarter production results in the next month, we examine how one investment bank thinks they have performed, in terms of quarterly iron ore shipments.

Quarterly shipment forecasts in focus

Using port data, analysts from Macquarie Wealth Management posit that Australia’s large-cap iron ore players have seen their operations face ‘little impact’ as a result of Covid-19, with individual firms ‘changing rosters to better deal with the virus and continue operations.’

Specifically, Macquarie currently believes that both BHP and FMG will meet their FY20 shipping guidance, with the investment bank forecasting that FMG’s June quarter shipments will come in at 45.0 million tonnes; while BHP's June shipments are currently forecast at 76.3 million tonnes.

By comparison, RIO's June shipments are expected to come in at a combined 90.1 million tonnes – made up of 85.8 million tonnes from Rio’s Pilbara operations and 4.3 million tonnes from the Iron Ore Company of Canada (IOC).

Rio Tinto closed out Wednesday's session down 0.83%, FMG down 0.65%, while BHP finished out the day flat.

The iron ore price outlook

Shipment forecasts aside, iron ore prices have continued to trade strongly in the last few months after a Brazilian judge ordered mining giant Vale (NYSE: VALE) to take around 10% of its iron ore production offline as a result of mounting coronavirus concerns. Chinese demand for iron ore has also remained robust.

In step with that, iron ore prices have remained elevated in response to these supply-side issues, with CME's front-month iron ore futures contract last trading at US$98.45 per tonne.

As a result of robust iron ore prices across the June quarter, Macquarie this week upgraded their FY20 earnings outlook for the iron ore miners in their coverage universe.

‘We remain positive on stocks with iron-ore exposure due to strong cash flow yields and earnings upgrade momentum,’ the investment bank said.

Australia’s Department of Industry, Innovation and Science (DIIS) appears more sceptical of the medium-term outlook for iron ore, noting in its recently released Resources and Energy Quarterly, that ‘It is expected that supply conditions will improve before the impacts of COVID19 fully pass, creating a likelihood of weaker prices.’

The DISS forecasts that iron ore prices will average US$65 per tonne in 2022, while total Australian export volumes are expected to hit 915 million tonnes by 2021 to 2022.

Looking forward, BHP is set to report their June quarter production results on 21 July, RIO on 17 July and FMG on 30 July.

Want to trade iron ore stocks?

Create an IG trading account or log in to your existing account to get started now.

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.

Act on share opportunities today

Go long or short on thousands of international stocks with CFDs.

  • Get full exposure for a comparatively small deposit
  • Trade on spreads from just 0.1%
  • Get greater order book visibility with direct market access

See opportunity on a stock?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Take your position
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Trade a huge range of popular stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See opportunity on a stock?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.