Ferrexpo increased pellet production by 42% y/y in January-September

Ferrexpo, an iron ore company with assets in Ukraine that is listed on the London Stock Exchange, stated that it increased pellet production by 41.9% in January-September 2024 compared to the same period in 2023, to 4.567 million tons.

In January-September, the company produced 3.781 million tons of premium pellets from its own concentrate (65% iron content), up 17.5% year-on-year. Another 460.39 thousand tons of pellets (65% iron content) were produced from third-party concentrate (+458% y/y). 326.17 kt of DR pellets (not produced in January-September 2023) were also produced.

The production of saleable concentrate for 9 months reached 557.87 thousand tons, up 117.4% y/y. The total volume of commercial products produced increased by 47.5% – to 5.125 million tons.

In the third quarter of 2024, Ferrexpo reduced its pellet production by 14.4% quarter-on-quarter – to 1.269 million tons. The company produced 163.52 thousand tons of DR pellets (+0.5% q/q), 944.28 thousand tons of premium pellets from its own concentrate (-14.5% q/q), and 161.92 thousand tons of pellets from third-party concentrate (-25% q/q). Concentrate production for the period decreased by 32.3% q/q – to 127.97 kt, while total commercial production amounted to 1.398 million tons (-16.4% q/q).

“For Ferrexpo’s operations, the third quarter presented a very challenging operating and macroeconomic environment.
As we highlighted in the interim results, the requirement to import 80% of our electricity from our western neighbours
remains in place, and the resulting high tariffs continue to have a negative impact on our costs,” commented Lucio Genovese, Executive Chair of Ferrexpo.

To mitigate the pressure on margins, he said, the company revised its production and sales strategy to focus on selling high quality iron ore products to customers in close geographical proximity.

According to Nikolay Kladiev, Group CFO, the combined effect of lower iron ore prices and higher production costs had a significant impact on the company’s profitability in the third quarter. At the same time, in the last days of September, China’s stimulus measures helped iron ore prices recover. Although pessimism in the market has decreased, the volatility of recent periods does not give any assurance that the respective levels will be maintained or grow further.

Ferrexpo is an iron ore company with assets in Ukraine that is listed on the London Stock Exchange. It produces and exports high-quality iron ore pellets for steel production. Its production assets are Poltava and Yeristovo Mines and the Belanovo Mine which is in development (all 100% owned each).