Australia's Grange Resources reported stronger iron ore pellet sales from its Savage River operation in the April-June quarter, but wet weather resulted in lower production and stockpiles.
The Tasmania-based company sold 764,836 mt of magnetite pellets in April-June, up 20% on 640,579 mt a year earlier and 18% higher than January-March sales of 649,714 mt.
Production was impacted by heavy rain over northern Tasmania, along with some remediation work at Savage River's North Pit, which caused some mining delays, Grange said in its June quarter report Monday.
Scheduled maintenance in the quarter impacted concentrate and pellet production facilities.
This resulted in the volume of mined magnetite ore falling 34% from the January-March quarter, and by 45% year on year, to 2.12 million mt in April-June.
Pellet production of 520,525 mt in the quarter subsequently fell by 20% from the previous quarter and by 14% year on year.
Weaker production meant pellet stocks were not replenished at the usual rate, resulting in stocks dropping to just 175,753 mt by the end of June, compared with usual levels of more than 400,000 mt.
Grange said it achieved an average price of $67.69/mt FOB Port Latta for its pellets in the April-June quarter, compared with $59.02/mt in the March quarter.
The company, which is Australia's only pellet producer, said demand remained strong and it expected to continue to achieve a premium for its product compared with benchmark 62%-Fe prices.
Its pellets are typically higher grade than those sold to China from Ukraine, Russia and India, and contains silica of 2.5%, phosphorous of 0.008%, and magnesium of 2.6%.
Its major shareholder and offtake partner is privately owned Chinese steel producer Shagang.
The company said all of its pellets would be sold on a secured term offtake basis in 2016 and for most of 2017.
