Ferrexpo Share Discussion Threads

[thags] 15/11/2020 21:09

It is crazy what the turnover will be this year given that the majority of sales are of the 65% premium product. What's more crazy is the ridiculously low share price

[bozzy_s] 15/11/2020 20:38

Same link zho. Thags is right - I've just added the 65% fines and pellet premium together. The main driver in the last few months has been a higher pellet premium.

[thags] 14/11/2020 12:18

i'm assuming you haven't added the premium on to get the full figure bozzy gave

[zho] 14/11/2020 11:50

bozzy_s,

Could I ask where you get your prices for 65% Fe fines?

I've found it more difficult to get reliable prices for iron than for gold, copper, platinum etc but I tend to use which has the most recent price for 65% Fe fines at $135.20, far below your figure of $161.20.

[bellbottom] 14/11/2020 11:30

Vale continuing to firm up and increase their market share of Chinese ore supplies.
They may indeed be keeping capacity at a controlled level in order to protect ore prices rather than driving them down, but when they hit their production target of 450 million tonnes pa and even before then, approaching those levels, then there is bound to be cause and effect.

Vale CFO stated, “The intent is not to oversupply the markets towards 450 (million tonnes). It is to have the capacity available to meet the market if the need be,”

For comparison of annual tonnage, FXPO are targeting 20 million tonnes pa from around 11 million tonnes currently.



Like Thags I had my finger over the sell button at 207p but held back based on my previous sells where the price shot up virtually the next day.

I admit I am tempted to sell half my holding on the next price climb above 205p and to buy into one of the covid hit shares that are bouncing back on the hopes of a successful vaccine. The bounce already started of course. The one thing giving me doubts is the Brexit factor. I can't get my head around the reality of the Brexit 'hit' in January 2021.

BB

[thags] 14/11/2020 07:41

Agree the figures will be good. That's why we need a TU soon before we see a steady dive down to 170 although I would prefer share buybacks rather than heavily taxed dividends...

[bozzy_s] 14/11/2020 03:59

Bit of profit taking this week. Not taking that risk myself - FXPO could announce another special divi at any time.

Had a quick look at the iron ore pellet price. It's actually rocketed higher since I last checked.

65% with pellet premium is $161.20 now, compared with....

27-Oct $152.30

30-Sept $145.90

31-Aug $142.50

31-July $133.66

30-June $127.66


H2 2020 looking like it will be easily the most profitable 6 months in FXPO's history.

[thags] 13/11/2020 13:03

The typical rot has started, back down to 170 ffs. I should have gone with my gut instinct

[astonoid] 13/11/2020 11:08

When the next dividend RNS comes out, you just watch this share upto the ex-divi date. Always booms pre divi.

[thags] 13/11/2020 11:06

I sincerely hope so these 200 retraces down are seriously annoying. There's absolutely no logic to it. When is the next TU?

[aimsurfer] 13/11/2020 10:49

Previous retraces from 200 were annoying but I just don't see that repeating with the pace dept is reducing and cash building up. While iron ore prices remain high this has to break to the upside sooner rather than later.

[yawn1971] 13/11/2020 09:01

Come on hold 200 !

[bellbottom] 12/11/2020 09:28

Touched on this company before and their potential for a new iron ore mine in Ukraine. Initially projecting around 4 million tonnes pa, rising to 8 million tonnes pa, producing 68% concentrate.



BB

[its the oxman] 11/11/2020 22:35

Will be a dip if lots more iron ore is produced and pellet price collapses. Not convinced of this myself.

[pyemckay] 11/11/2020 21:37

is there a big dip in next year's earnings or are brokers still to catch up. thoughts

[zho] 11/11/2020 15:28

Although ... "Brazilian miner Vale SA will place caution before capacity as it seeks to avoid driving down the iron ore market and presses forward with its recovery from a deadly dam break in 2019."

[bellbottom] 11/11/2020 15:16

Hi Thorpe,

Yes, it's likely we'll see price nearer $90 US in the next 6-8 months. Could even go lower. I've seen quotes as low as $60!!

With Brazil back on full capacity then we are more than likely to see a drop. Let's just hope it is not significant.

BB

[thorpematt] 11/11/2020 13:50

BB
Many thanks for the comprehensive reply, I apreciate it.

That 11m T guidance I did miss during my research.

On the PER, I note that the discount has been long present for FXPO in that regard.

What is different now (as opposed to say 5 years ago) is that the debt is now much reduced. One consequence is that the book value ha doubled in that period.

The reduced debt now make the EV / PBT ratio very attractive.

I did read the section in the presentation on the ditribution by country. The increased China ditribution should unwind in 2021 but the inference is that that increased channel could still be exploited depending on price opportunities.

I am guessing the broker forecasts are based on a lower spot prices than the present 120USD/T.

[bellbottom] 11/11/2020 12:08

This copied from yesterday's South China Morning Post.

"Despite the sector’s expectation of a slowdown in Chinese steel production, metal analyst Mysteel Global observed “exceptionally robust” activity in the third quarter, with September daily average output reaching a record of an average of 3.09 million tonnes per day.

“China’s iron ore imports, on the back of strong steel demand and output, had been growing ever since April when the country’s economy and industrial activity restarted, and its iron ore imports had grown 13 per cent on quarter,” Mysteel Global analysts Victoria Zou and Hongmei Li said on Tuesday.

“Not only that, the country’s iron ore imports have come from many new origins other than Australia and Brazil as the norm, as countries such as Canada, Russia, India, Ukraine and Sweden, all of which have been keen to export iron ore to China when the demand from their own steel mills and elsewhere had all been largely compromised by the ongoing battle against the pandemic.”

BB

[bellbottom] 11/11/2020 11:58

Hi Thorpe,

This from Ferrexpo's website;

"The Group expects to begin commissioning its latest concentrator expansion in 2H 2020, which will increase its run of mine ore processing capacity by approximately 6 million tonnes per annum, and enable the Company to fully utilise its existing installed pelletiser capacity of 12 million tonnes per annum in 2021.........investment will be for incremental high IRR projects with the goal of sustainably increasing output to approximately 20 million tonnes over the medium term."

2020 production figure should be around 11 million tonnes.

I think the brokers forecasts are out of date. Chinese demand has been high and forecast to remain high. Ferrexpo produces over 90% of 65% concentrate.

They previously had been refurbishing pellet lines which obviously affected production but I believe they are all now fully operational and production should increase steadily over the next few years as per their own forecasts.

PE Ratio is 4.2% so very low compared to industry average of around 12.6. Fair value should see an share price of around £3.00 to £4.00. Being held back for reasons I won't dwell on.

I suppose you could argue that the demand from China will not be maintained at such a high level, but with a covid vaccine on the cards, Ferrexpo's more traditional markets should open up again.

Remember, Ferrexpo have more than doubled their supplies to China this year which filled gaps from its European markets.

BB

[thorpematt] 11/11/2020 09:58

Are any posters/ holders here, able to give me a summary of why the 2021 estimates broker's forecasts are lower than 2020 ?

I assume there is a fall off in production predicted for next year?

[bellbottom] 10/11/2020 12:28

Excellent article about Ferrexpo and its environmental credentials.



BB

[bellbottom] 10/11/2020 12:25

Old news maybe, but scroll down for a few paragraphs concerning the ex CEO.
The whole article is actually worth a read, even if you don't necessarily agree with their opinions of the situation.



BB

[bellbottom] 10/11/2020 11:56

Weemonkey,

Generally I agree but events in the past happening within Ukraine have effected the share price and personally I am interested in the ebbs and flows of the situation in Ukraine.

We are still very much undervalued due partly to what is and has been happening in Ukraine. I think of the ex CEO's bank and the general situation with oligarch banks and the legacy of their being closed down and the ongoing prosecutions and court cases, or not, of oligarchs, including our own ex CEO.

Ferrexpo share price should be over £3.00 otherwise.

I'm a long term holder and certainly the dividends, especially this year, have been a boon.

Ultimately, Ukraine needs to tackle corruption as this will always cast a shadow over the company and hold back the share price as it has done in the past.

Not expecting any news until January report. Hopefully share price will stay well above 200p and climb upwards of 240 or so.

BB