Ferrexpo increases integrated pellet capacity 14% to 12 mmt

Ukraine’s largest iron ore pellet exporter Ferrexpo
(FXPO LN) has launched concentrator section 9 at Ferrexpo Poltava Mining, its
main Ukrainian asset, according to a July 16 report by Interfax-Ukraine, citing
a company press release.

The total CapEx amounted to more than USD 100 mln and
the new concentrator will add 2 mmt per year to Ferrexpo’s total concentrate
capacity, bringing it to 15 mmt per year, according to the release, as reported
by Interfax-Ukraine.

Dmytro Khoroshun: Following
the completion of this investment project that was started in 2017, Ferrexpo
has an integrated (relying fully on concentrate produced internally) capacity
of 12 mmt of pellets per year (32.9 kt per day). The new concentrator section 9
will produce enough concentrate for the production of about 1.5 mmt of pellets
per year, or 14% of the 10.5 mmt per year integrated pellet capacity Ferrexpo
had before the launch of concentrator section 9.

Recall, in 1H20, Ferrexpo produced 5.6 mmt of pellets,
or 30.8 kt per day.

We maintain our expectation for Ferrexpo’s 2020 production
volume at 10.8-11.5 mmt (29.5-31.3 kt per day), or 3-9% more yoy. The recent
production volume guidance from the company was for a 9.3% yoy increase to 11.5
mmt (31.4 kt per day) in 2020.