Ukraine-focused iron ore miner Ferrexpo said Thursday it saw a 10.8% gain in pellet sales to 2.84 million mt over the first quarter compared with a year ago due to strong demand indicated by higher premiums charged to customers.
The company saw resilient pricing despite a 11% quarter-on-quarter drop in underlying benchmark iron ore fines prices in China, according to a company update. The average FOB Yuzhny Netback price in Q1 was 3% lower than Q4 2013, it said.
"The mix of sales to key markets remained broadly in line with Q4 2013 with 54% of sales to traditional and 30% of sales to growth markets with the remainder to natural markets," it said.
Ferrexpo identifies traditional markets as those mainly in Eastern and Central Europe, with China, Japan and other Eastern Asia markets categorized as growth. Turkey, the Middle East, Italy and other nearby destinations are deemed those with a natural logistical advantage.
Ferrexpo said it remains on track and budget to increase production during 2014 to a targeted 12 million mt/year run rate, and in Q1 increased the amount of ore processed and pellets produced.
Total pellet production was 2.82 million mt in Q1, up 1.8% compared with Q4 2013, with 65% Fe pellets up 5.5%.
Ferrexpo is seeking to improve iron concentrations and its ability to process lower-quality ores. It commissioned a second floatation plant, including additional vertimills, to allow fine grinding in the period.
Work to refurbish floatation plant No. 1 as well as construction of a third and final floatation section is ongoing, for expected completion this year.
