Ukraine’s largest iron ore pellet exporter Ferrexpo (FXPO LN, FXPOLN) produced 900 kt of pellets in January, Interfax-Ukraine reported on Feb. 16. This was 11.8% less yoy and about 15.0% less than in December 2016. Iron ore concentrate production by Ferrexpo amounted to 1.05 mmt in January, which is 15.9% less yoy.
Andriy Perederey: The decline in output is most likely a result of some maintenance work at the company’s upstream assets. In talks to us, the company confirmed that it is performing some planned maintenance, but gave no details. We maintain our projection that Ferrexpo will produce about 11.7 mmt of iron ore pellets in 2017 (+4% yoy). We also note that the company is enjoying a surge in iron ore prices, which almost doubled from mid-February 2016 (USD 46/t in mid-February 2016, CFR, China ports vs USD 90/t in mid-February 2017) and retain our neutral view on Ferrexpo bonds.