SYDNEY - [AAP] Fortescue Metals (ASX: FMG) shipped less iron ore in the December quarter, while also continuing to lower its production costs.

The Pilbara miner shipped 40.5 million tonnes of iron ore in the three months to December 31, down from 44 million tonnes in the September quarter and the 42.2 million tonnes shipped in the December quarter a year earlier.

Cash production costs dropped to a record $US12.08 per wet metric tonne, down four per cent from a year ago and one per cent from the September quarter.

Chief executive Nev Power, who will step down from his role in February, said productivity and efficiency initiatives had continued to reduce the company's cost base, offsetting higher strip ratios, exchange rates and fuel prices.

"Our focus on improving safety continues, together with our clear market and product strategy to deliver value to our customers, generating strong cash margins and shareholder returns," Mr Power said.

Fortescue is maintaining its shipping guidance of 170 metric tonnes per year, and said it is also is on track to meet its full-year price realisation guidance of between 70 and 75 per cent of the benchmark Platts 62 CFR index.

That is despite its average realised price for contracts entered in the December quarter dropping to 66 per cent of the benchmark index.

The company's gross debt stood at $US4.2 billion at December 31, down from $US4.4 billion at September 30.

Fortescue shares were up 6.5 cents, or 1.3 per cent, at $5.155 at 1315 AEDT.

 

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