Kazakhstan-based mining group Eurasian Natural Resources Corporation Plc. (ENRC) has announced its production results for the first quarter of 2009.
In line with previously announced cutbacks of 35 percent for the company's ferrochrome production and of 50 percent for its primary iron ore concentrate, in Q1 2009 ENRC's production volumes in its ferroalloys and iron ore divisions were broadly at the same levels as in Q4 2008. Thus, ENRC's total ferroalloy production in January-March went down by 32.4 percent year on year to 253,000 mt, its ferrochrome output decreased by 30.7 percent to 203,000 mt, its iron ore extraction dropped by 34.8 percent to 6.617 million mt, and its primary iron ore concentrate production decreased by 34.3 percent to 2.675 million mt, all compared to Q1 2008.
According to the company's release, ENRC expects significant pricing pressure on its key commodities to continue into the second half of the year. The average ferroalloy sales prices in the first quarter decreased by 53 percent quarter on quarter, while its average iron ore sales price was down by 24 percent.
"Continued focus on control of operating costs, combined with the recent devaluation, should help us maintain our competitive cost curve position. However, given the unit cost reductions already achieved, we expect our ability to reduce costs further to be limited," states the company's release.
So far demand in Q2 2009 is ahead of ENRC's original expectations, but "the outlook for the full year remains unclear and it is premature to suggest that current levels of improved demand from China signal the onset of a global economic recovery," says ENRC.