A global footprint

Ferrexpo has developed a global network of premium customers across five continents, which all use Ferrexpo's iron ore pellets to create high quality forms of steel for modern life.

Through investment in its operations, the Group has developed a product offering that is focused exclusively on high quality, high grade forms of iron ore, which are used to produce high quality forms of steel. Through Ferrexpo's global presence, the Group's marketing offices have developed long-standing relationships with a number of key customers globally, and typically sell production under established long-term contracts that reflect the prevailing iron ore index, pellet premiums and international freight rates.

Iron ore pellets are distributed around the world to customers using a combination of Ferrexpo's own logistics capabilities in Ukraine, either exporting to Europe via rail or barge, or loading products onto oceangoing vessels at the port of Pivdennyi (formerly known as Yuzhny) in southern Ukraine. From Pivdennyi, the Group exports its iron ore pellets to Asia, the Middle East and North America.

A breakdown of the Group's pellet sales by geographic region in 2021 is provided in the map shown below.

Images: Ferrexpo has the ability to ship its pellets to Europe by both rail and barge - historically representing approximately 50% of shipments

Case Study: Pivoting Logistics During The War

The Russian invasion of Ukraine in 2022 has resulted in Ukraine's access to the Black Sea via its ports being cut off, and as a result, the Group has had to pivot its sales portfolio towards accessible markets. Since the outbreak of the war in February 2022, the Group's logistics and marketing teams have diligently sought to redirect tonnages to accessible customers via rail and barge, whilst also exploring new logistics corridors for re-establishing links into the seaborne market.

As announced in the Group's Interim Results for 2022 in August 2022 (link here), the Group is in advanced discussions to recommence material sales volumes to customers that have historically been accessed via oceangoing freight, with small shipments made to date in 2022 to such customers from Black Sea and Baltic Sea ports.

Since IPO in 2007, the Group has consistently shown flexibility in its marketing and logistics, ranging from a shift towards steelmakers in Asia during the early phase of the global Covid-19 pandemic in 2020, meeting rising demand for iron ore in this region at that point in time, to the pivot towards Europe seen in 2022 after the outbreak of Russia's invasion. Ferrexpo benefits from its central geographic location between Europe and Asia, and through producing a premium form of iron ore that is in demand by a global customer base, the Group is able to adapt its business to reflect changing market conditions.