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Ferrexpo PLC on Monday said it has reduced its output of iron ore pellets, amid difficulties in getting production out of war-torn Ukraine, but said it is in talks with additional port operators in central Europe for seaborne exports.
Ferrexpo shares were down 10% at 147.51 pence each on Monday morning in London.
The Baar, Switzerland-headquartered firm mines for iron in central Ukraine. It produced 4.4 million tonnes of iron ore pellets so far in 2022 as of the end of May, down 8% from the same point in 2021.
Ferrexpo said it will lower production for a period of time as the war in Ukraine blocks its export routes.
Ferrexpo has seen a 400,000 tonne increase in iron ore inventories across the months of March, April and May, which it will seek to reduce as logistics constraints ease.
‘Russia's invasion of Ukraine in 2022 has resulted in periodic disruption to the railway network across the country, with the national rail operator having to consistently repair and re-open damaged sections of the railway network following Russian air strikes,’ Ferrexpo said.
Chief Executive Officer Jim North said: ‘In light of the news announced today, we are lowering our short-term production schedule for the summer months, and we will look to increase production once we have greater clarity on logistics going forward. The gradual reopening of our access to the seaborne market is a positive for the group and we will prioritise these efforts as we understand the importance of reconnecting with this segment of our customer portfolio.’
Ferrexpo's barging operations accounted for 800,000 million tonnes of iron ore deliveries in 2021. However, due to a Russian missile strike in southwest Ukraine, it said it is no longer able to use its barging operations that serve European customers.
Ferrexpo said it is in advanced discussions with additional port operators in central Europe for seaborne exports, whilst Ukraine's Black Sea ports remain closed.
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