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.