March 14 (Bloomberg) -- Ferrexpo Plc, the Ukranian iron-ore producer controlled by Chief Executive Officer Kostyantin Zhevago, expects prices for the steelmaking ingredient to hold around current levels for the rest of the year as supply remains “tight.”
“There’s no fundamental reason that prices for iron ore should drop this year,” Chief Financial Officer Chris Mawe said today by phone. “The market seems to have found its level.”
The benchmark price for iron ore imported to China, the largest consumer of the material, rose 0.6 percent to $144.10 a metric ton yesterday, according to The Steel Index data. Prices may climb 9.3 percent to an average of $157.50 in the fourth quarter, according to the median estimate of seven analysts surveyed by Bloomberg.
“Iron ore is still under-supplied; the supply and demand balance remains tight,” Mawe said. “Supply and demand should remain tight for two or three years yet.”
Ferrexpo earlier today reported a 34 percent increase in profit after prices gained last year. Net income advanced to $567.8 million in 2011 from $422.9 million a year earlier, the Baar, Switzerland-based company said in a statement. Sales rose 38 percent to $1.79 billion.
Iron ore imported to China averaged $167.60 a ton in 2011, compared with $146.70 a ton a year earlier. Ferrexpo shipped 28.2 million tons, an 11 percent increase from the prior year.
Ferrexpo rose 1.4 percent to 337.8 pence by the close of trading in London, taking its gains this year to 26 percent.
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