KYIV. Oct 18 (Interfax-Ukraine) – Iron ore producer Ferrexpo with assets in Ukraine seeks to produce at least 11.2-11.3 million tonnes of iron ore pellets in 2016, which is slightly less than in 2015. This is linked to repair works. The share of high-quality 65% Fe products would grow from 87% last year to 94%, Head of Investor Relations and Corporate Communications at Ferrexpo Ingrid McMahon has said.
“We hope that it would be more [than 11.2-11.3 million tonnes]. It is important for us that 94% is high-quality 65% Fe products,” she told reporters in Kyiv last week.
McMahon explained a small decrease compared to the results of the previous year by repair carried out in Q3 2016.
“We will try to catch in Q4 2016,” she said.
She said that current demand on the company’s products exceeds its possibilities.
According to the company’s presentation, demand on pellets could grow from 408 million tonnes in 2015 to 493 million tonnes in 2020, or 3.9-4% every year. McMahon said that in 2018 the situation on the market could become more volatile, as Brazil’s Samarco that produced 30 million tonnes of pellets a year and suspended operations after an incident in the tailing dump in November 2015 would return to the market. She expressed confidence that Ferrexpo would have good positions on the market thanks to high quality of its products and low cash cost.
McMahon said that thanks to it the company recently managed to increase the share of customers from Europe and Japan and started supplies to South Korea. However, the share of China of total supplies fell from 20-25% to 13%. She said that in 9M 2016 the share of customers from Central and Eastern Europe was 48%, Western Europe – 17%, Northeast Asia – 16% and Turkey where demand on 62% Fe pellets still recorded – 6%.
She said that in 2017 the company intends to invest at least $50 million in development.
Ferrexpo is interested in dredging works at the Yuzhny port announced by the Ukrainian Sea Port Authority as part of the implementation of the project to build new berths by TIS and Cargill.
She said that in the future if the markets are liberalized, the company could consider the possibility of buying own locomotives for its fleet of 2,252 wagons and return to river transport for delivering products using the Dnipro River, not only the Danube River.
