Ferrexpo pellet output rises 15% in May

Ukraine’s largest iron ore pellet exporter Ferrexpo (FXPO LN, FXPOLN) produced 860 kt of pellets in May, Interfax-Ukraine reported on June 13. This is 14.5% more than in April (11% more based on daily average production) but 11% less yoy. In 5M17, Ferrexpo’s total pellet output decreased 12.3% yoy to 4.235 mmt.

Andriy Perederey: May output was lower yoy, as we expected, as the company is implementing some capacity refurbishment works that will be finished in mid-June. For that reason, we expect the company will boost pellet production in June as compared to May. Also, we are keeping unchanged our expectation of Ferrexpo’s 11.3 mmt of pellet output in 2017 (a 0.9% yoy increase). We retain our neutral view on Ferrexpo Eurobonds.