Fortescue Ltd (ASX: FMG) shares are falling on Thursday morning.
In morning trade, the iron ore giant's shares are down 2.5% to $22.10.
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Why are Fortescue shares falling?
Investors have been selling the company's shares today following the release of its December quarterly production update.
According to the release, Fortescue reported total iron ore shipments of 50.5 million tonnes for the December quarter. This was up slightly on its first quarter shipments.
This meant the company achieved first half FY 2026 shipments of 100.2 million tonnes, which is a record and represents a 3% increase on the prior corresponding period.
Management believes this leaves the company well positioned to meet its full year shipments guidance of 195 million tonnes to 205 million tonnes.
Iron Bridge has strong half
Fortescue's production from the Iron Bridge magnetite project continued to build during the quarter.
It achieved shipments of 2.2 million tonnes, which took first half Iron Bridge shipments to 4.3 million tonnes. This is up 37% year on year.
Iron Bridge concentrate achieved an average revenue of US$122 per dry metric tonne, outperforming benchmark indices due to its higher iron content.
On the cost front, Fortescue's hematite C1 unit cost rose to US$19.10 per wet metric tonne during the quarter. This is up 5% from the September quarter and reflects higher diesel prices, exchange rate movements, and the normalisation of inventory impacts that had benefited the prior quarter.
For the half year, C1 costs averaged US$18.64 per tonne, which is slightly above the top end of its full year guidance range of US$17.50 per tonne to US$18.50 per tonne.
While its FY 2026 guidance remains unchanged, this modest cost pressure may help explain why Fortescue shares are weaker today, particularly given ongoing volatility in iron ore prices.
Commenting on the company's performance, its growth and energy chief executive officer, Gus Pichot, said:
We continue to make disciplined progress across our global growth portfolio of metals, critical minerals, energy and technology opportunities. In line with our critical minerals strategy, this quarter we entered into a binding agreement to acquire the remaining 64 per cent of Alta Copper's shares. Fortescue will apply its strong track record of project delivery and well-established technical, permitting and community engagement expertise to diversify and expand our copper portfolio and exploration footprint in Latin America.
We've also continued to progress studies into the Belinga Iron Ore Project in Gabon, establishing a Presidential Taskforce to streamline the planning and delivery of an integrated mine, rail and port solution.
