It is reported that Ferrexpo signs a 10 year contract with Voestalpine steelmaker for 3 million tons annual pellets’ shipments to the Austrian steel mill. The volume makes up a third of current production of FXPO. The price setting mechanism is yet unknown, but is expected to be based on a quarterly basis given the recent shifts in iron ore pricing schemes globally.

According to Millennium Capital analyst “The news is POSITIVE for FXPO, as the company secures the sales of the third of its output in the long run. In this way Ferrexpo hedges the risks of its future sales in anticipation of the announced expansion program. The company underlines that Austrian steelmaker belongs to the traditional European market of FXPO sales, where it plans to regain strong positions thanks to geographic proximity and good quality of its’ pellets.”

(Sourced from Millennium Capital)