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Ferrexpo cuts pellet production by 68% in Q3 2022
KYIV. Oct 6 (Interfax-Ukraine) – Mining company Ferrexpo Plc with assets in Ukraine in July-September 2022 produced 839,000 tonnes of pellets, which is 68% less than in the same period in 2021, as a result of Russia’s invasion of Ukraine in 2022, and associated logistics constraints requiring production to be curtailed.
"The third quarter of 2022 saw an additional constraint on the Ukrainian railway network with the increase of shipments of grain during the annual harvest season, further to the other demands and constraints facing logistics providers in Ukraine at the present time," the company said at the stock exchange on Thursday, citing CEO Jim North.
Ferrexpo continues to operate in accordance with the volume of sales that the company can achieve at the present time, and expect to increase production once it has further clarity on logistics corridors.
"The Group continues to adapt to its present circumstances, as demonstrated by our increased focus on producing direct reduction pellets, with this higher grade product typically receiving an additional premium in the market," the CEO added.
According to the report, is currently operating with one out of four pelletiser lines in operation, reflecting accessible customer markets.
According to the press release, production of higher grade direct reduction pellets increased by 35% to 263,000 tonnes in Q3 2022, meaning that this product represented 31% of total pellet production during the period (FY2021: 4%).
Ferrexpo said that sales of 1.0 million tonnes in Q3 2022, representing a 65% year on year decrease.
Production of commercial concentrate increased by 45% year on year to 65,000 tonnes in Q3 2022, representing the group’s efforts to meet the demands of accessible customer markets, according to the press release.
According to him, in 2022, the group continues to operate fatality-free in 2022, but a total of eight of its workers that have died whilst serving in the armed forces of Ukraine.
Overall, in the first nine months of this year, pellet production amounted to 5.637 million tonnes, which is 31% less than in the same period last year, but direct reduced pellet production increased by 7% to 353,000 tonnes.
Ferrexpo owns 100% of the shares of Poltava Mining, 100% of Yeristovo Mining and 99.9% of Belanovo Mining.