Fortescue has released its March 2018 quarterly production results, reporting iron ore shipments of 38.7 million tonnes (mt) and cash production costs (C1) of US$13.14 per wet metric tonne (wmt). Year to date C1 costs are US$12.43/wmt, equivalent to a C1 cost of US$11.90/wmt after normalising for an assumed exchange rate of US$0.75 and fuel costs of US$53 per barrel (WTI). Fortescue refinanced its 9.75% Senior Secured Notes during the quarter transitioning the balance sheet to an investment grade structure and reducing annual borrowing costs by US$130 million.

Cash on hand at 31 March 2018 was US$2.6 billion inclusive of amounts committed to the repayment of debt and the interim dividend in April 2018. The adjusted cash balance at 31 March 2018 is US$0.6 billion. Net debt at 31 March 2018 reduced to US$3.1 billion from US$3.3 billion at 31 December 2017. Exploration spend was primarily focussed on iron ore and lithium in the Pilbara with expenditure of US$13 million during the quarter. This brings the total FY18 expenditure to-date to US$42 million.

The rebound in steel demand post Chinese New Year was slower than expected with ongoing localised sinter plant restrictions and recent lower blast furnace operating rates contributing to the market conditions. A seasonal lift for the remainder of this quarter is expected to be supportive of steel markets and is key to the ongoing strength in iron ore demand. Profit margins for China's steel mills have declined from the peaks reached in the December 2017 quarter and there are now signs that steel mills are refocussing on costs resulting in increased demand for Fortescue's high value-in-use lower iron content ores.

Indian economy could grow at 7.4% in the fiscal year to March 2019 after a “resilient performance” in the second half of the previous year, Reserve Bank of India (RBI) Governor Urjit Patel said.

The economy likely grew at 6.6% in the 2017-18 fiscal year against 7.1% a year earlier, but higher investments led to a significant pick in the second half, Patel said in his address to the International Monetary and Financial Committee in Washington.

Higher government spending, manufacturing and services helped India regain its status as the world’s fastest growing major economy in the October-December quarter, surpassing China for the first time in a year.

Asia’s third-largest economy grew 7.2% in the December quarter, its fastest in five quarters.

“There are now clearer signs that the revival in investment activity will be sustained. Global demand has been improving, which should encourage exports and boost fresh investments. On the whole, real GDP (gross domestic product) growth is expected to expand at 7.4 per cent in 2018-19, with risks evenly balanced,” he said.

Since November 2016, consumer price inflation has generally remained below a medium-term target of 4 per cent, Patel said.

India’s annual retail inflation eased for a third straight month in March to 4.28 per cent, driven by smaller rises in food prices.

“Several factors are likely to influence the inflation outlook, including a possible moderation in food prices if the monsoon turns out to be normal and is supported by effective food supply management,” Patel said.

Wholesale food prices in March fell 0.07% year-on-year, compared with a 0.07% rise a month earlier.|

But higher oil prices could pose a risk, he cautioned.

India was also “committed” to fiscal prudence, Patel said.

With the help of higher tax revenue and a rationalisation of subsidies, the fiscal deficit had steadily come down to 3.5% of GDP in 2017-18, without compromising on public investments and social sector spending, he said.

India has set its fiscal deficit target for the 2018-19 fiscal year at 3.3% of gross domestic product.

NEW YORK: With oil prices hitting $75 per barrel, it was meant to be one of the smoothest meetings Opec has had in recent years. The night before the meeting, the ministers gathered in Jeddah celebrated with a traditional Saudi sword dance - just as US President Donald Trump had done when he visited Saudi Arabia last May. 

Little did they know that Trump was about to spoil their post-meeting party when he tweeted that oil prices had rallied too far. 

“Looks like Opec is at it again. With record amounts of oil all over the place, including the fully loaded ships at sea. Oil prices are artificially Very High! No good and will not be accepted!" Trump said on Twitter. 

The Organization of the Petroleum Exporting Countries is in the midst of an oil supply-cutting deal with non-Opec producers like Russia that has helped erase a global glut and boosted oil prices to their highest since 2014. 

Oil prices fell on Trump's tweet as market analysts tried to interpret what it could mean for US policies. 

Ministers and delegates were having lunch at the time, to celebrate Opec Secretary General Mohammad Barkindo's birthday, when delegates were alerted to Trump’s tweet. 

"We in Opec pride ourselves as friends of the United States," Barkindo told reporters when emerging from the lunch and asked for his response to the tweet. An Opec source said delegates were confused by Trump's stance: “Higher oil prices helped the US oil industry and the Americans themselves. The US oil industry would have collapsed if it wasn't for this Opec deal”. 

UAE’s Energy Minister Suhail Mohamed al-Mazrouei said prices were not artificially high. Asked whether he thought it was fair that the US president was getting involved in Opec matters, he said jokingly: “Since when is it about fairness?” 

Trump, a regular twitter user, has never tweeted about Opec before although he has regularly attacked cartels that control prices. The United States is on course to become the world's largest oil producer but it has never participated in Opec meetings due to tough anti-trust legislation. 

Reuters reported this week that Saudi Arabia would be happy to see crude rise even higher to $80 or even $100 a barrel, a sign Riyadh will seek no changes to the supply-cutting deal at a June meeting to set policy. 

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