Ferrexpo daily pellet output drops 5% m/m in March

Ukraine’s largest iron ore pellet exporter Ferrexpo
(FXPO LN) produced 854 kt of pellets in March, which amounts to 27.5 kt per
day, or a 5.0% m/m loss, according to Concorde Capital’s analysis of the
company’s 1Q21 production report released on April 8.

In 1Q21, Ferrexpo’s pellet output amounted to 2.71 mmt
(30.2 kt per day), or 0.4% less yoy and 12% less qoq.

Ferrexpo noted in its report that the qoq drop of its
production in 1Q21 reflected ongoing pelletizer upgrade work. An upgrade was
completed on one of its four pelletizers in 1Q21 and further work is underway
in 2Q21. Ferrexpo said overall pelletizer capacity to increase by 0.5-1 mmt per
year following the completion of the upgrades.

Dmytro Khoroshun: Ferrexpo’s launch of section 9 of its concentrator
capacities in July ensures the company will be able to return to high
production rates once its pelletizer capacity increases in 2H21 as a result of
the upgrades.

However, if the iron ore prices decrease later in
2021, it might take Ferrexpo several quarters to make up for profits foregone
in 1H21 due to decreases in production volumes because of the upgrades, such as
in March and likely in February.