19th May 2016 07:53
LONDON (Alliance News) - Ferrexpo PLC on Thursday said it continued to perform strongly in the first quarter of 2016, with its sales volumes underpinned by strong demand for iron pellets and production of its premium pellets rising.
The iron ore pellets producer said pellet production from its own ore was 2.9 million tonnes in the first quarter, up 6.0% on the same period a year earlier, whilst production from the premium 65% iron pellets from its own ore grew 20% compared to the period a year earlier.
Ferrexpo said premium 65% iron pellets represented 96% of total production volumes, whereas this figure was 85% a year earlier.
Total production, including third-party ore, was in line with a year earlier at 2.9 million tonnes, Ferrexpo said.
Average cost of production continued to fall due higher production volumes, lower oil prices and local currency devaluation, Ferrexpo said, but noted that the cost of production increased marginally in April following a recovery of oil prices.
Ferrexpo said, year to date, sales volumes have been underpinned by strong demand for pellets, and reported it made shipments to new customers in Western Europe and South East Asia in May. With increasing demand, spot pellet premiums are improving from the low levels of December 2015, Ferrexpo added, although it said "they remain below 2015 average levels".
"Ferrexpo is one of the lowest cost pellet producers in the world, enabling it to remain profitable and cash generative during the current commodities downturn. The group's production and marketing operations continue to perform very well, producing record levels of pellets, notably a significant increase in the output of the group's premium 65% Fe pellets, and increasing Ferrexpo's presence in key markets," said Non-Executive Chairman Michael Abrahams.
Shares in Ferrexpo were up 1.0% at 32.08 pence on Thursday morning.
By Hannah Boland; [email protected]; @Hannaheboland
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