In 1Q 2025 Ferrexpo reached the strongest quarterly output since 2022

Ferrexpo, the London-listed iron ore producer with operations in Ukraine, increased total commercial production in Q1 2025 by 20% q/q and 3% y/y to 2.1 mln tonnes. This includes 1.3 mln tonnes of pellets and 0.8 mln tonnes of high-grade 67% Fe iron ore concentrate.

Due to weaker demand,  pellet production reduced by 26% y/y in Q1 in favour of a surge  commercial concentrate by 3.2 times over the same period.

“For the first quarter of 2025, total commercial production was the highest quarterly rate since the full-scale invasion started in February 2022. This is due to an increase in production of high-grade concentrates, sold to customers in Asia, combined with a stable production of Ferrexpo premium pellets. We are pleased that once again we have demonstrated our ability to adapt to changing market conditions”, commented Lucio Genovese, Interim Executive Chair of Ferrexpo.

During the quarter Ferrexpo operated two of its four pelletizing lines, alongside ongoing concentrate production. However, in March, Ukraine’s tax authorities informed Ferrexpo Poltava Mining and Ferrexpo Yeristovo Mining that VAT refunds for January 2025, totaling UAH 512.9 mln (approximately US$12.5 mln), would be suspended.

In response, Ferrexpo was forced to downscale operations to one pellet line and implement broad cost-cutting measures across the organization. These actions are expected to negatively impact the workforce, mining and processing operations, capital investment, and Ferrexpo’s humanitarian efforts. The company warned that the ripple effects would extend to the local economy of Horishni Plavni – a city of 50,000 where Ferrexpo is the largest employer – and the broader Poltava region, affecting around 3,000 small and local businesses which depend on company’s activity.

As previously reported by GMK Center, dollar-denominated inflation has driven up production costs for Ukrainian iron ore miners. One producer reported an 11% y/y increase in dollar-based costs by mid-2024. Electricity prices remain a major issue, accounting for up to 50% of the cost of concentrate production. Amid these challenges, GMK Center forecasts a 15% drop in Ukraine’s iron ore exports in 2025, to 27 mln tons.