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Australia’s Fortescue Metals Group reported record quarterly iron ore shipments on Thursday, boosting its sales as prices spiked to five-year highs, and forecast stronger shipments in the coming year.

Fortescue said the price it received for its ore in the June quarter jumped 30 percent from the previous three months to $92 per dry metric tonne, narrowing its discount to benchmark 62% iron ore to 13% from as wide as 37% a year ago.

Australian iron ore miners have benefited from a surge in prices following supply disruptions in Brazil and Australia, and analysts expect them to return windfall profits to shareholders next month. Fortescue has performed strongly aginst its peers as Chinese steel mills constrained by tighter margins have bought more of its mid-grade ore.

The world’s fourth-largest iron ore miner forecast stronger iron ore shipments in 2020, but also flagged higher costs as it ramps up production to meet demand from China, its largest market.

“A strong end to FY19 for FMG meeting both production and cost guidance,” RBC said in a report. “(Financial year) guidance points to potential upside to shipments relative to our estimates, though this also corresponds with higher costs.”

Fortescue forecast fiscal 2020 shipments of 170 million to 175 million tonnes, compared with 2019 shipments of 167.7 million tonnes.

Iron ore prices hit five-year highs of $126.50 on July 2 after January’s catastrophic dam disaster in Brazil cut supply. As prices rose, China’s steel makers bought more lower grade and cheaper ore. The price differential between high and low grade iron ore reached its smallest in early June since late 2016.

Fortescue said it expects 2020 capital expenses of $2.4 billion, about twice as much as 2019. It also forecast cash production costs at $13.25 to $13.75 per wet metric tonne, up as much as 8% from $12.78 in the fourth quarter.

The miner, which has stepped up sales of a new medium-grade West Pilbara Fines product to Chinese steel mills, flagged strong demand in China, despite signs of slowing industrial activity.

It delivered 9 million tonnes of the new product in fiscal 2019, within its forecast range. It expects to supply about 17 million to 20 million tonnes of the product in 2020.

Fortescue shipped 46.6 million tonnes in the quarter ended June 30, compared with 38.3 million tonnes in the prior quarter, and in line with a UBS estimate.

Fortesecue shares were trading down 5.4 percent in early afternoon trade, with the sector heading lower after Brazil’s Vale said it has been authorised to partly restart production at one of its mines.

(By Melanie Burton, Ambar Warrick and Shriya Ramakrishnan; Editing by Bernard Orr and Richard Pullin)