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Ferrexpo PLC on Monday reported an increase in production during the third quarter of 2025, boosted by Chinese demand for commercial concentrate. The Baar, Switzerland-based iron ore producer in Ukraine said total commercial production in the third quarter that ended September 30 rose 3.3% to 1.51 million tonnes from 1.46 million in the second quarter to June 30. This was despite ‘continued curtailment in pelletising capacity to just one line’, Ferrexpo noted. For the nine months to the end of September, total commercial production increased 0.9% to 5.1 million tonnes from 5.0 million the year before. ‘Strong’ demand from Chinese customers for Ferrexpo’s high-grade low-alumina concentrates pushed third-quarter commercial concentrate production 36% higher to 871,323 tonnes from 640,202 tonnes in the second quarter, the company said. On a nine-month basis, commercial concentrate production multiplied nearly four times higher to 2.3 million tonnes from 457,264 tonnes a year earlier. Total pellet production, on the other hand, sank 22% on-quarter to 638,963 tonnes from 821,882 tonnes. Nine-month pellet production declined 39% to 2.8 million tonnes from 4.6 million tonnes a year prior. ‘The refusal by the Ukrainian tax authorities to refund [value added tax] remains the most critical issue for the business...Assuming that VAT refunds will also be suspended for August and September, the estimated total non-refunded VAT would be $58 million. The cost-cutting measures implemented in the second quarter continued in the third quarter. At the end of September, approximately 20% of the workforce were on furlough or reduced hours. These and other decisions are not easily made, however, they have helped to keep the business viable,’ said interim Executive Chair Lucio Genovese. The Ukrainian tax authorities in March decided to suspend refunds of VAT at its two main operating subsidiaries, Ferrexpo Poltava Mining and Ferrexpo Yeristovo Mining. This resulted in lower liquidity and to Ferrexpo downscaling production to one pellet line. For the period from January to July, non-refunded VAT totals $47 million. Genovese continued: ‘During the third quarter, VAT issues were compounded by an intensification in aerial attacks by Russia on the Ukrainian rail network and domestic energy infrastructure in Ukraine. These issues bring additional levels of complexity how we manage our operations and logistics, yet our teams on the ground are increasingly well versed in mitigating the challenges that confront us on a daily basis. Our ability to do so and continue to produce, transport and export is testament to the ingenuity of our people and the agility that we have built into the business over the last three and a half years of war.’ Shares in Ferrexpo were down 3.6% at 51.02 pence in London on Monday morning. The stock remains up 17% over the past year. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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