Swiss-headquartered resources company Ferrexpo, whose main interests are in Ukrainian iron ore assets, has announced that in the first 11 months of the current year its overall iron ore pellet
production increased by three percent year on year to 10.2 million mt. The company stated that the
production was not impacted by the recent difficulties in
Ukraine.
In December, Ferrexpo's total pellet
production is expected to fall below expectations by approximately 140,000 mt as a result of reduced power availability during the peak demand hours of the day. This is due to lower domestic coal
production and low stocks at coal-fired power stations in
Ukraine. Ferrexpo currently has pellet stocks in hand and so the company's December shipments are expected to be unaffected.
The Ukrainian authorities are introducing measures to mitigate this situation including looking to import coal and electricity as well as allowing corporate establishments to directly import electricity or generate it through tolling during the peak demand hours of the day.
Ferrexpo said that, if the situation remains unchanged, it expects that the capacity of its processing facilities will remain at around current levels in the first quarter of 2015, after which it is expected to improve in the second quarter when peak power demand declines following the winter months.
The company also pointed out that in the first quarter next year, in the event of continued power constraints, Ferrexpo will increase output of 65 percent Fe premium pellets and prioritize delivery under long-term contracts. Spot sales will be at lower levels.