Ferrexpo, a producer of high-grade iron ore pellets, achieved total commercial production of 2.12 million tons in the first quarter of 2025. This was the company's highest quarterly production level in the post-war period that began in 2022.
The increase in production was driven by growth in the production of high-grade iron ore concentrate, especially for Asian markets. Concentrate production increased 193% q/q to 777 thousand tons. However, total pellet production decreased by 10% and premium pellet production by 36% y/y.
The company stated that despite the operational success, imported electricity costs and the decline in pellet prices had a negative impact on profitability. On top of that, the Ukrainian Tax Administration's suspension of a USD 12.5 million VAT refund for January severely weakened the company's liquidity.
Following this development, Ferrexpo decided to switch to production with a single pellet line and to make extensive cost cuts in all its operations. This will affect more than 3,000 local businesses, including the city of Horishni Plavni, home to 50,000 people and the company's main production center. Reduced tax and energy payments are also expected for the national economy.
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