Ferrexpo increased output by 0.9% y/y in January-September

Ferrexpo, an iron ore producer with assets in Ukraine listed on the London Stock Exchange, increased its iron ore production by 0.9% year-on-year in January-September 2025 – to 5.07 million tons, according to the company’s report.

The company has shifted its focus from pellet production to production of high-grade iron ore concentrate considering significant growth in demand in this segment. Over the nine months, commercial concentrate production increased 4.9 times year-on-year to 2.26 million tons, while pellet production decreased 38.5% year-on-year to 2.81 million tons.

During the third quarter, Ferrexpo produced 638.96 thousand tons of pellets (-22.3% q-o-q). The entire production volume consists of premium pellets, while the production of DR pellets has been suspended. Concentrate output increased by 36.1% q-o-q to 871.32 thousand tonnes.

“The third quarter was the first period in which we felt the full impact of the Ukrainian tax authorities’ decision to suspend VAT refunds to our Ukrainian subsidiaries. Despite operating only one pellet production line, we achieved total production of 1.5 million tons for the quarter,” said Lucio Genovese, interim chairman of Ferrexpo’s board of directors.

According to him, the key challenge remains the non-reimbursement of VAT, which amounted to $47 million from January to July. Assuming that the situation will not change in August-September, this amount will increase to $58 million.

“Last quarter, VAT issues were compounded by Russia’s intense attacks on Ukraine’s railway infrastructure and energy sector. Despite these challenges, our teams are finding ways to maintain production, logistics, and exports. This demonstrates the ingenuity of our people and the flexibility of our business, which we have developed over the last three and a half years of war,” added Genovese.

It should be noted that in the context of war and a difficult external economic situation, state support for strategic industries such as iron ore production should be a priority. Without this, the country risks losing one of its key sources of foreign exchange earnings and national currency stability.

In 2024, Ukraine increased its iron ore exports by 89.9% compared to 2023, to 33.699 million tons. Revenue from mineral exports amounted to $2.8 billion (+58.7% y/y).