Ferrexpo to reduce capex amid falling iron ore prices

Benjamin Chiou Sharecast | 07 Oct, 2014 07:06 - Updated: 07:41 | | |

Mining helmets 285
  • 171.60
  • 3.31%5.50
  • Max: 171.60
  • Min: 162.10
  • Volume: 2,903,799
  • MM 200 : n/a
17:18 30/03/17

Ukraine-focused iron ore producer Ferrexpo said it is looking to scale back on investment in the face of low commodity prices.

The company managed to increase pellet production from own ore by 3.7% year-on-year in the nine months to 30 September to 8.1m tonnes.

Output had ramped up strong during the most recent quarter, rising 13.7% from the preceding three months, after production was constrained in the second quarter due to the scheduled refurbishment of pellet line number three.

Sales volumes of pellets over the first nine months of the year increased by 8% to 8.2m tonnes, helped by "strong demand from all market segments".

However, prices have fallen in recent months with the average Platts benchmark price for 62% Fe iron ore down 12% to $90 per tonne compared with the second quarter.

Ferrexpo said it has now more or less completed its projects to increase output to 12m tonnes per annum and improve the quality of all pellets to 65% Fe.

"In the current low-priced iron-ore market environment new growth capital expenditure will be reduced and will focus on high return quick payback projects in order to maintain the strength of the balance sheet," the company said.

More news

17:15 London close: FTSE's progress dampened by ex-dividends, sterling's rise and Brexit worries

Stocks in London passed through a relatively quiet Thursday, with numerous ex-dividend equities, a stronger sterling and Brexit worries combining to dampen progress heading into the end of the first quarter.

17:11 Sector movers: Industrial engineers, miners jump at quarter-end

Cyclicals were clearly in favour heading into the end of the first quarter, on the back of positive analyst chatter out of some of the top brokers in the world and as prices for most key industrial metals reversed their losses seen in overnight trading.

16:58 FTSE 250 movers: Petra provides the shine; RPC melts

Petra Diamonds shone brightly on the FTSE 250 on Thursday with shares in the company up 9% as it announced a $600m notes issue and refinancing package.

16:39 Friday preview: UK GDP story should remain unchanged

UK national growth figures for the fourth quarter of last year will be the main economic data event on Friday, along with details on the current account and the index of services and house price data from Nationwide.

15:52 Small cap news round-up

Insurance premium finance-focussed finance group Orchard Funding Group announced its unaudited results for the six months to 31 January on Thursday, with the board reporting it lent £31.1m for the period.

15:47 Bank of England could use palm oil in new £20 note

The Bank of England is pondering using palm oil in the production of the new £20 note following criticism from vegans and religious groups after the revamped £5 note was found to contain traces of animal fat.

14:45 Results round-up: International Public Partnerships, Polypipe Group

International Public Partnerships posted its full-year results for the 12 months to 31 December on Thursday, reporting net asset value growth of 24.3% to £1.6bn.

15:44 Broker tips: Morrison, Kingfisher, Ashtead, Admiral

Bank of America Merrill Lynch upgraded Morrison to ‘buy’ from ‘underperform’ and lifted the price target to 275p from 220p.

14:34 Thomas Cook's summer bookings increase with strong demand for Europe

Thomas Cook’s winter programme is closing out as expected although it is seeing some margin pressure in parts of the business due to increased competition.

13:34 Initial US weekly unemployment claims drop 3,000 to 258,000

A key measure of the US jobs market improved slightly during the latest reference week, but still overshot economists' forecasts.