Monday 13 January 2020 4:15 pm

Iron producer Ferrexpo's shares surge despite fall in production

Iron ore producer Ferrexpo said that pellet production slowed in 2019, but that the business continued to generate strong margins.

In a trading update the FTSE 250 firm said that it had produced 10.5m tonnes of pellets in 2019, down from 10.6m in 2018.

Read more: Ferrexpo chief executivee Kostyantin Zhevago temporarily steps down

However, the Swiss company said that prices were up 16 per cent over the last 12 months, which had offset a $5 rise in production prices from $43 to $48.

Sales volumes also saw a small rise from 10.2m to 10.3m, with net debt at $282m.

The company has declared an interim special dividend of 6.6 cents as a result of its strong cash generation.

A prolonged trade dispute with the US hit Chinese demand for steel, with falling prices for steel making ingredients such as iron ore the result.

China is one of the world’s top producers of steel, although demand is expected to fall 0.6 per cent in 2020.

Last year the firm, which has assets in Ukraine, twice delayed its full-year results, after it revealed that some of the funds it gave to a charity in the country might have been misappropriated.

Read more: Probe finds miner Ferrexpo’s charity funds could have been misused

Chief executive Kostyantin Zhevago, who owns more than 50 per cent of Ferrexpo, stepped down temporarily in October to deal with a problem at another business.

Shares in the firm surged over eight per cent today.