AT A GLANCE: Record-breaking iron ore prices boost Q1 results at LKAB

A summary of Swedish state-owned iron-ore producer LKAB’s financial results for the first quarter of 2021 ending March 31.

In brief

  • LKAB’s production volumes were about the same as in the first quarter of 2020, while deliveries where slightly lower.
  • Company has benefited from historically high spot price levels for iron ore during the period.
  • Fastmarkets’ iron ore index for 62% Fe fines, cfr Qingdao averaged $167.40 per tonne in the first quarter of 2021, up by $77.46 from an average of $89.94 per tonne in the first quarter of 2020 and its highest level since the third quarter of 2011.
  • Sales jumped by 56% year on year, boosted by higher prices.
  • In February 2021, LKAB  decided to temporarily re-open the Mertainen mine in Svappavaara to meet the increased demand for iron ore products and to de-bottleneck its pelletizing operations.
  • Recovery work continued during the first quarter of 2021 following a seismic event at the Kiruna mine in May 2020, with production capacity at the mine now back up to just under 90%
  • The proportion of pellets in iron ore output in the first quarter was 88% compared with 89% in 2020.

Outlook for 2021
At the beginning of 2021, iron ore prices have continued to grow, hitting record high levels, while demand for LKAB´s highly upgraded iron ore products remains good.

The global extent of the coronavirus pandemic and its impact on communities and economies will continue to affect LKAB through 2021, but to what extent is difficult to predict, the company said.

Q1 2020 results
(year-on-year change)

Sales
12.256 billion Swedish krona ($1.453 billion), up by 52.4% from 8.044 billion krona

Operating profit

7.153 billion krona, up by 124.2% from 3.191 billion krona

Profit 
5.978 billion krona, three times higher than 1.879 billion krona last year

Iron ore products output
7.4 million tonnes (unchanged)

Iron ore products deliveries
6.9 million tonnes, down 5.5% from 7.3 million tonnes

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