Upbeat Ferrexpo expects iron ore pellet premiums to rebound on growing long-term demand, supply constraints

Despite falling to a more than 18-month low point in April, iron ore producer Ferrexpo expects pellet premiums to bounce back this year, with growing long-term demand supported by the need for increased steelmaking efficiency.

"We continue to believe long-term demand for pellet will be supported by [the need] for iron ore of a higher grade and in a form that reduces energy inputs, slag volumes and [pollutant] emissions in the steelmaking process, while [at the same time] improving the quality of the final product," Ferrexpo non-executive chairman Steve Lucas said on Tuesday April 23. Iron ore pellet premiums increased strongly in the third quarter of 2018, which Ferrexpo said was due to high profitability in the steel industry leading mills increase utilization rates to maximize output, with mills in China additionally looking to decrease emissions by increasing their use of higher-grade feedstock such as pellets.  Last September, Fastmarkets' iron ore implied premium over the MB 62% Fe Iron Ore Index...

Published

Ross Yeo

April 23, 2019

17:30 GMT

London