Fortescue Metals Group boss Nev Power is buoyed by rising iron ore prices as the miner continues to slash costs at a rapid pace.
The world's fourth largest iron ore miner has stepped up its savings program and maintained its interim dividend after a four per cent drop in half year profit to $US319 million ($A441.95 million).
Mr Power said a recent lift in iron ore prices above $US50 a tonne had come as buyers restocked after lunar new year festivities in China.
"The most important thing from our perspective is the continuing underlying demand for steel in China, and provided there is not apprehension or the oversupply of iron ore we'll have a very strong market going forward," he told reporters.
"We do see the slight improvement in price as a positive and hopefully we'll see that continue."
Fortescue has cut its cost guidance to $US13 per wet metric tonne by the end of the 2015/16 financial year, and lowered its breakeven price guidance to $US28.80 per dry metric tonne.
The miner managed to reduce cash costs to $US16 a tonne in the first half of the financial year, down from $US30 a year earlier.
Cost cutting and improved operating performance had offset weaker iron ore prices during the six months to December, Mr Power said.
No major cut jobs are planned as part of the cost reductions, though staff levels typically fluctuate to meet demand, he said.
Fortescue's focus remains in reducing its net debt, which currently stands at $US6.1 billion.
UBS analyst Glyn Lawcock said Fortescue was making more than $US20 a tonne at current iron ore prices.
"If Fortescue can manage sub $US30 all-in delivered costs, then they'll make good cash over the remaining part of the year," Mr Lawcock said.
Current prices are prohibiting companies from expanding production and putting pressure the market's smaller players, he said.
"You're not going to drive Fortescue out of business by pushing prices into the low $US30s," he said.
"There's no advantage for BHP, Rio and Vale."
Fortescue shares dropped 10 cents, or 4.8 per cent, to $2.00.
FORTESCUE TAKES AN AXE TO COSTS
* Net profit down 4pct to $US319m
* Revenue down 31pct to $US3.3b
* Interim dividend unchanged at three cents
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