Ukrainian iron ore producer Ferrexpo Plc is selling its entire output and trading profitably, although spot prices remain under pressure, the London-listed firm said on Tuesday.
Sales volumes in April were 898,000 tonnes, more than its production in the month, the company said in a trading statement ahead of its annual general meeting.
"Ferrexpo continues to perform well in extremely tough trading conditions," chairman Michael Abrahams said. "Cash costs of production continue to benefit from the weaker Ukrainian hyrvnia, and Ferrexpo continues to trade profitably."
The main reason for weak spot iron ore prices into China on an FOB basis were high freight rates from the Black Sea into China. But reliance of Ferrexpo on seaborne sales into China has been lessened recently since some demand has returned in its home market.
"The resumption of sales to certain European and Ukrainian customers indicates the start of a slow normalisation of sales conditions in these markets," the statement said.
"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."
Source: Reuters
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