Ferrexpo sees third-quarter production edge higher

FTSE 250 iron ore miner Ferrexpo saw a slight increase in pellet production from own ore in the third quarter, but eased back on the purchases of third-party concentrate.

Compared with the second quarter, pellet output from own ore rose by 2.8% from 2,305.4k tonnes to 2,371.0k tonnes. Year-to-date (YTD) production, at 6,933.9k tonnes, was 3.1% higher than the same period of 2011.

The firm said that it achieved around one million tonnes of concentrate production per month in August and September.

MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

However, total output rose just 0.9% quarter-on-quarter (Q/Q) and slipped 1.4% in the YTD due to the reduction in production/reprocessing from purchased raw materials. The company purchased 42.8% less pellets Q/Q, bringing the YTD comparison to -58.0%.

Ferrexpo said in August at the time of its interim results that the iron ore market had been volatile with market prices for iron ore down 20% in the first half. Revenues fell 15% from $855m to $731m in the six months to June 30th.

Speaking alongside the group's results this summer, Chairman Michael Abrahams said: "While the market outlook has deteriorated recently and remains variable, medium term iron ore pricing should remain underpinned by growth in developing markets. In line with its stated strategy, Ferrexpo will continue to exploit its substantial reserves to create sustainable value for shareholders."