Ferrexpo pellet output rises 13% m/m in August

Ukraine’s largest iron ore pellet exporter Ferrexpo
(FXPO LN, FXPOLN) produced 825 kt of pellets in August, Interfax-Ukraine
reported on September 14. This is a 12.9% increase m/m, but 12.1% less yoy. In
8M18, Ferrexpo produced 6.7 mmt of pellets, or 10.7% less yoy.

Andriy Perederey: The company’s results are disappointing as we expected producton to return to nearly full capacity
utilization in August (which is 1.0 mmt per month). We still expect the company
will further increase its production in the remaining months, but we are
revising our 2017 forecast of Ferrexpo’s pellet output to 10.4 mmt (from 10.8
mmt expected earlier), which would be 6.8% less yoy. We retain our neutral view
on FXPOLN Eurobonds. We already see the August results creating selling
pressure on FXPO stock.