Barclays downgrades Ferrexpo due to multiple headwinds including appreciation in hryvnia

Analysts at Barclays downgraded their recommendation for shares of Ferrexpo to 'equalweight', citing a myriad of factors on both the demand and supply side.

They were projecting a 15.0% rebound in iron ore supplies from the major producers over the back half of 2019 after a disruption-ridden first six months of the year and with Samarco set to return, they added that the outlook for pellets in 2020 was fading.

Demand for pellets from its customers meanwhile was "fading", with Ferrexpo's inventories having building in the front half of the year by the most since the company's flotation in 2007.

There were also currency headwinds to contend with as the Ukrainian hryvnia appreciated on a local cost base that was rising at a pace of 9.0%.

Hence, given the downside risks to iron ore and pellet premiums, they downgraded their recommendation for the stock and cut their target price from 350.0p to 245.0p.