Low iron ore prices and fewer deliveries are putting pressure on LKAB’s profitability. Efforts to reduce costs are having a positive effect, the company said. It reported a loss for the second quarter of MSEK 228 ($27 million). Despite an oversupply of iron ore, demand for LKAB’s high-grade iron ore products remained stable and the pellet premium is in line with last year, which favors LKAB with a pellet proportion of 84% for the quarter. Deliveries totaled 5.3 million metric tons (mt), down from 6 million mt in Q2 2014. In addition to a shortage of crude ore, deliveries were affected by an extended maintenance stoppage in the Port of Narvik and delays in deliveries to customers in the MENA region.
LKAB has already initiated a comprehensive effort to cut costs and is now reviewing possible organizational changes.