Fortescue Ltd (ASX: FMG) shares are under pressure on Friday morning.
At the time of writing, the ASX 200 iron ore stock is down 1% to $20.77.
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Why are Fortescue shares falling today?
The weakness appears to be driven by the release of the company's third-quarter update, which showed shipments falling short of expectations.
According to the update, Fortescue reported total iron ore shipments of 48.4 million tonnes (Mt) for the third quarter.
This was below consensus estimates of approximately 49Mt, which may have disappointed investors.
Weather impacts and softer quarterly performance
While shipments were up 5% on the prior corresponding period, they were down from 50.5Mt in the previous quarter.
The company pointed to weather disruptions as a key factor, particularly at its Iron Bridge operation.
Shipments of Iron Bridge concentrate were just 2.0Mt for the quarter, with production and outload impacted by Tropical Cyclones Mitchell and Narelle.
These disruptions also led to a downgrade in Iron Bridge shipment guidance for FY 2026, which has been revised to 9Mt to 10Mt from 10Mt to 12Mt previously.
Costs and pricing
On a more positive note, Fortescue reported improved cost performance during the quarter.
Hematite C1 unit costs came in at US$18.29 per wet metric tonne, which was 4% lower than the previous quarter.
The company also achieved a realised hematite price of US$92 per dry metric tonne, representing 89% of the benchmark Platts 61% index.
Iron Bridge concentrate achieved a stronger price of US$122 per dry metric tonne, reflecting its higher-grade product.
Strong nine-month performance
Despite the softer quarterly result, Fortescue highlighted that its performance over the longer term remains solid.
Total shipments reached a record 148.7Mt for the nine months to 31 March, which is 4% higher than the prior corresponding period.
This suggests that while the third quarter missed expectations, overall production trends remain positive.
Fortescue Metals and Operations CEO, Dino Otranto, said:
We delivered a solid quarter, contributing to record shipments of 148.7 million tonnes for the nine months to March. That reflects a significant effort from the team right across the business.
At the same time, we're getting on with decarbonising our operations and we're already seeing the benefits. Given volatility in global energy markets, there's never been a clearer reason why this matters. For us, it's about strengthening energy security, lowering costs and eliminating emissions.
Green energy investment
In a separate announcement, Fortescue revealed that it has approved a US$680 million investment to expand its green energy capacity in the Pilbara.
The investment will fund the development of a 200MW Pilbara Green Energy Project, which is expected to deliver additional renewable energy generation beyond what is required for its Real Zero by 2030 strategy.
Management advised that the project will form part of a fully integrated, off-grid renewable energy system, including large-scale battery storage and firming capability.
The project is expected to be completed by 2028 and is designed to support growing demand for green power from industry, including data centres.
Fortescue's Executive Chairman, Dr Andrew Forrest AO, said:
Fortescue is already demonstrating in the Pilbara that heavy industry can operate on a fully integrated renewable grid – eliminating fossil fuels while improving cost, reliability and control. "We are now extending this model to new customers, particularly data centres, helping meet one of the fastest growing sources of demand in the world.
Outlook
Fortescue has maintained its FY 2026 shipment guidance of 195Mt to 205Mt, which includes Iron Bridge shipments of 9Mt to 10Mt.
However, with the latest quarterly result missing expectations and weather disruptions impacting performance, investors appear cautious in the near term.
