Ferrexpo increases pellet output 13% yoy in 9M13

Ukraine’s top iron ore pellet exporter Ferrexpo (FXPO LN) reported a 12.5% yoy increase in its iron ore pellet output to 8.05 mmt in 9M13. The growth was fueled by pellet production from iron ore at its newly launched Yeristovo Mine (1.40 mmt during the period) and 26.8% yoy growth in low-profit pellet production from third party iron ore concentrate (to 0.28 mmt). At the same time, pellet production from the ore of its flagship Poltava Mine declined 8.2% yoy to 6.36 mmt in 9M13. On a quarterly basis, Poltava Mine increased output 3.3% qoq to 2.14 mmt in 3Q13, production at the Yeristovo Mine grew 2.8% qoq to 545.5 kt, while pellet output from third party ore jumped 26.6% qoq to 120.6 kt.

Roman Topolyuk: The official production results for 9M13 came in a bit higher compared to preliminary data announced last week by the Interfax news agency. The production decline at Poltava Mine was temporary in 1H13 and reversed itself in 3Q13 since the company debottlenecked its concentrate capacity in May, thereby increasing it to the equivalent of 12 mmt of pellet production p.a. (up from 11 mmt) Factoring in quarterly results, we are adjusting upwards by 4% our 2013 output projections for Ferrexpo to 10.9 mmt (+12.3% yoy).