Ferrexpo (LSE:FXPO) has reported a sharp drop in production for Q2 2025, citing financial strain from a halt in VAT reimbursements by Ukrainian tax authorities. The loss of liquidity has forced the company to scale back operations, amid broader cost pressures and continued geopolitical instability in the region.

In response, Ferrexpo has adjusted its production strategy to cater to robust Chinese demand for high-grade, low-alumina iron ore concentrate. This shift helped offset some of the impact from reduced volumes and allowed the company to maintain relevance in a competitive export market. To preserve financial stability, the company has also introduced a series of austerity measures, including shortened working hours and cuts to non-essential spending, in the face of falling iron ore prices and rising input costs.

The current outlook for Ferrexpo remains clouded by significant operational and financial headwinds. Core concerns include sliding revenues, eroding profitability, and unfavorable technical signals. Additionally, the ongoing geopolitical situation in Ukraine continues to present both legal and operational risks. While recent share purchases by company leadership indicate confidence, market sentiment remains cautious due to the broader array of challenges.

About Ferrexpo

Ferrexpo is a Swiss-based iron ore producer with key mining operations in Ukraine. Traded under the FXPO ticker on the London Stock Exchange, the company is a constituent of both the FTSE All Share and FTSE4Good indices. Ferrexpo specializes in high-grade iron ore pellets, which support efficiency and lower carbon emissions in steelmaking. Prior to Russia’s full-scale invasion of Ukraine in 2022, Ferrexpo ranked as the world’s third-largest exporter of iron ore pellets, supplying premium products to major steel producers around the globe.

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