Chile's CAP Mineria's net profits in the first nine months of the year fell 83% to $17.3 million as lower iron ore prices cut income despite higher shipments and record production, according to results late Friday.
The company, the mining arm of Chilean iron and steel group CAP, shipped 9.6 million mt of iron ore, up 14% from 8.4 million mt in the same period last year, as production hit a record 10.9 million mt.
But the average sales price for shipped material fell 37% to $52.40/mt, outweighing a 29% drop in the sales cost.
Average costs fell to $34.30/mt, from $51.80/mt a year ago.
"The drop in prices reflects the strong decline in international iron ore prices as a result of the arrival on the market of increased volumes from Australia and Brazil together with a certain weakness in Chinese demand for commodities," CAP said.
During the third quarter, CAP shipped 3.3 million mt of iron ore, up 12.8%, but revenues fell 20.5% as iron ore prices averaged $44.70/mt, down 36.8% from $70.70/mt in the same quarter of 2014.
CAP said demand for its high-grade magnetite concentrates, particularly 66-69% pellet feed and 65-68% pellet, from clients in Asia and the Middle East remained firm.
"Even considering the increased supply of iron ore during 2015. The competitive advantages of these products mark a positive difference, both in their placement in the market and the premiums they attract for quality and magnetic properties," it said.
CAP said it has also boosted production of Sinter Feed (62% Fe) and Premium Sinter Feed (63% Fe) where it has production costs comparable with the world's largest producers.
The company shipped 1 million mt of sinter feed during the first nine months of 2015, up from 171,000 mt in the same period last year.
It aims to ship 2 million mt by the end of December, up from 926,000 mt during the whole of 2014.
