Ferrexpo boosts daily pellet output 23% m/m in June

Ukraine’s largest iron ore pellet exporter Ferrexpo (FXPO
LN, FXPOLN) produced 910 kt of pellets in June, which amounts to a rate of 30.3
kt per day, a 22.9% m/m decrease, according to our analysis of the company’s
2Q18 production report released on July 3.

In 1H18, Ferrexpo’s pellet output amounted to 5.096
mmt, a 1.2% yoy decline. Ferrexpo noted in its report that the decrease is due
to a planned 65-day pellet line refurbishment.

Dmytro Khoroshun: Ferrexpo’s
June daily pellet production rate is above our estimate of 26-27 kt, indicating
the April-June refurbishment was performed without delays.

We expect Ferrexpo will produce 10.5-10.9 mmt of
pellets in 2018, resulting in 29-30 kt per day and a 1-4% yoy gain. We retain
our neutral view on FXPOLN Eurobonds.