Ferrexpo reduces iron ore pellet output 36.5% in 2023

MOSCOW. Jan 11 (Interfax) - Mining company Ferrexpo plc, with assets in Ukraine, produced 3.845 million tonnes of iron ore pellets in 2023, down 36.5% from 6.053 million tonnes in 2022.

Ukrainian media reported, quoting a company statement, that pellet production halved in Q4 compared with Q3 2023 but was 50.4% higher than in Q4 2022.

Ferrexpo only produced pellets with 65% Fe content in 2023.

"Even with winter setting in, we have been able to operate one, sometimes two, of our four pellet lines, to match the reduced export capacity available to us, and continue supplying premium products to our premium customers," Lucio Genovese, Ferrexpo Interim Executive Chair, was quoted as saying.

Ferrexpo continues to retain the majority of its workforce, despite being forced to significantly reduce production. This and higher logistics costs due to a lack of access to Black Sea export routes affected margins.

It was possible to recommence shipping out of certain ports. In addition, iron ore prices strengthened over 20% during the final quarter, and have continued to hold up well into the New Year.

"We also note the early signs of an uptick in pellet demand in Europe. These factors combined could be supportive of our large fixed cost base and higher logistics costs. In my opinion, improved demand and higher prices bode well for the year ahead for Ferrexpo," Genovese said.

The group's net cash position, subject to minor final year-end adjustments, was approximately $109 million as of December 31, 2023, compared with 106 million a year previously, with minimal lease obligations and no debt.

Ferrexpo owns 100% Yeristovo Mining and Poltava Mining and 99.9% of Belanovo Mining.