The UK-based company Ferrexpo, whose main interests are in Ukrainian iron ore assets, has announced that it is continuing to produce at full capacity and is successfully selling its entire production.
Accordingly to the company's release, in April 2009 Ferrexpo's sales amounted to 898,000 mt, exceeding its production for the month in question. The company's spot prices for iron ore sold into China remain under pressure on an FOB basis, primarily as a result of high freight rates from the Black Sea to China. However, reliance on the seaborne spot market for the placement of sales volumes has been reduced in recent weeks by the initial resumption of low levels of offtake by Ferrexpo's European and Ukrainian customers. In addition, Ferrexpo's cash costs of production continue to benefit from the weaker Ukrainian hyrvnia.
"The resumption of sales to certain European and Ukrainian customers indicates the start of a slow normalization of sales conditions in these markets. We expect pricing to remain under pressure in the current quarter and, although there is a likelihood of improvements in the market, it is difficult to predict with certainty the outcome in the second half of the year," Ferrexpo's chairman Michael Abrahams stated.