- Black Sea disruption halts output
- Cash constraints weigh on operations
Ferrexpo plc has temporarily suspended iron ore mining and pellet production at its operations in Ukraine, citing continued disruptions to Black Sea exports and growing pressure on working capital. The mining company said ongoing security risks around Ukrainian ports have severely affected its export logistics, forcing it to halt operations for the time being.
The decision comes days after a vessel carrying around 55,000 t of Ferrexpo’s direct reduction (DR)-grade pellets was recovered from the Black Sea following a drone attack in late July. The vessel has been moved out of the war-risk zone and is now being towed to a nearby port, where its condition and cargo will be inspected.
As per company reports, operations will restart only after export conditions improve and additional working capital becomes available. In the meantime, the company will continue supplying its European customers from existing inventories. It expects its available cash to last until mid-September 2026, although this will depend on iron ore prices, operating costs, VAT refund issues and ongoing legal proceedings involving Ferrexpo Poltava Mining.
The suspension came post a stronger second quarter. In Q2 CY’26, Ferrexpo’s pellet production rose 64% q-o-q to 860,213 t, while output of high-grade iron ore concentrate increased 52% q-o-q to 103,196 t from 67,825 t in Q1. Even so, its H1 CY’26 iron ore production fell 54% y-o-y to 1.55 million tonnes (mnt), reflecting the continued challenges facing its Ukrainian operations.
Outlook
Ferrexpo’s inventory is expected to support near-term deliveries to European customers. However, if the production suspension continues for an extended period, it could reduce the availability of high-grade pellets in the seaborne market.
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