Ferrexpo has announced disruptions to its logistics operations across the Black Sea

As a result of the Russian attack, a vessel carrying 55,000 tonnes of pellets belonging to the group was damaged

Ferrexpo, an iron ore producer with assets in Ukraine, has reported that a vessel carrying 55,000 tonnes of the group’s DR pellets was damaged by Russian drones in Ukrainian waters of the Black Sea. This is stated in the company’s press release.

According to Ferrexpo, the vessel remains afloat for the time being, though the condition of the cargo and the structural integrity of the vessel are unknown. Although the crew were rescued, one crew member was killed.

The company currently has approximately 189,000 tonnes of pellets ready for shipment (including 55,000 tonnes of high-quality DR pellets (FDP) on the damaged vessel and approximately 90,000 tonnes in storage). The cost of producing and delivering these stocks amounts to approximately $20 million.

“Due to the ongoing drone and missile attacks in and around the port, as well as on loaded vessels departing from Ukrainian ports, the group does not expect to be able to load additional vessels via this export route in the near future, given that shipowners have given advance notice of the cancellation of their vessels,” the group said in a statement.

The company has filed a claim under its existing insurance cover and is working with the relevant parties to settle the claims.

The disruptions are reported to have affected Ferrexpo’s liquidity. The company currently forecasts that it will have sufficient net available cash to operate until the end of August 2026. This forecast remains subject to volatility in iron ore prices, operating costs, the resolution of logistical issues, and other factors (planned fundraising, the suspension of VAT refunds and ongoing legal proceedings relating to the Poltava Mining and Processing Plant).

Ferrexpo had forecast an increase in sales of DR pellets for export from Black Sea ports in the second half of 2026 as part of its product mix optimisation.

The Board of Directors is evaluating several operational and financial scenarios to try to mitigate the negative impact.

It should be noted that, for the first half of 2026, Ferrexpo reduced its iron ore production by 54%  year-on-year – to 1.55 million tonnes. Production of premium pellets fell by 41% year-on-year – to 1.22 million tonnes. Over the same period, production of DR pellets doubled year-on-year to 163,200 tonnes. This volume was produced in the second quarter.