FMG shipped 42.2 million tonnes, 9% down quarter-on-quarter, but up 5% year-on-year.

C1 costs rose slightly quarter-on-quarter to $12.95 per wet metric tonne.

Average revenue fell from $92 per dry metric tonne in the June quarter to $85/t, but was still 89% higher year-on-year.

"The Fortescue team has delivered a strong performance across all aspects of the business in the first quarter of FY20, building on our record results in FY19," FMG CEO Elizabeth Gaines said. 

"Through the quarter we maintained our enhanced product mix with strong demand for our range of products, including our 60.1% iron content West Pilbara Fines.

"This is reflected in Fortescue's contractual price realisation which averaged 89% of the benchmark 62% CFR Index price during the quarter."

Strong cashflow generated during the quarter has resulted in net debt dropping to just $500 million at September 30, down from $2.1 billion at June 30, the lowest since FMG expanded capacity in 2014.

The company repaid $200 million and refinanced the balance of the $1.4 billion term loan.

Gross debt was $3.4 billion.

Cash on hand increased to $3.4 billion from $1.9 billion at June 30, including $500 million reserved for the payment of the final dividend and $600 million reserved for the final FY19 tax payment due in December.

FMG has renewed its $500 million share buy-back program for a further 12 months.

Morgans analyst Adrian Prendergast described it as a steady quarter for FMG.

"The quarterly in our view is overshadowed by the fact that benchmark spot iron ore prices have fallen 28% since their July 2019 peak, while FMG's share price has risen 5% during the same time," he said.

"This comes despite FMG holding (by far) the iron ore price sensitivity (both earnings and valuation) to the iron ore price of its major seaborne peers. We don't expect this breakdown in fundamentals to be sustained (if investor sentiment remains the only positive)."

Prendergast maintained a reduce rating for FMG.