Ferrexpo daily pellet output drops 13% m/m in July

Ukraine’s largest iron ore pellet exporter Ferrexpo
(FXPO LN) produced 812 kt of pellets in July, which amounts to 26.2 kt per day,
a 12.7% m/m decrease, according to our analysis of data reported by
Interfax-Ukraine on Aug. 19.

In 7M19, Ferrexpo’s pellet output amounted to 6.17 mmt
(29.1 kt per day), a 2.6% yoy increase.

Dmytro Khoroshun: It’s
possible that July’s m/m decrease in Ferrexpo’s pellet output is related to the
company starting its planned 75-day maintenance of one of its four pelletizers.
This maintenance was planned for 2H19, but Ferrexpo has so far not provided
exact dates for this operation.

We continue to expect Ferrexpo’s 2019 production
volume to be in line with the company’s guidance of 10.6 mmt (about 29.1 kt per
day), flat yoy. Nevertheless, we note the opportunity for Ferrexpo to boost its
sales and production volumes in 2019 because of the Vale mine disaster in
Brazil.