Ferrexpo has reported a decline in pellets output of 4% m-o-m in February, while total output for 2M10 is up 34% y-o-y. On a daily basis, pellets production actually increased 3% m-o-m in February. Pellets production from third-party iron ore reached 8% of total output, the highest level in recent months, raising the possibility that the company is facing ore mining bottlenecks. While we have not yet reached this conclusion, it would be a substantial negative development. Ferrexpo currently operates at 9.1 mt of annualized output, up 3.5% y-o-y, and this could continue to be the mid-term maximum capacity until stripping works are carried out to increase in-house iron ore supply.