Ferrexpo upgraded by Liberum despite bearish iron ore view

Analysts at Liberum felt that as Ferrexpo shares have underperformed so far this year, the firm's valuation was starting to look "reasonable".

Ferrexpo shares have fallen 43% in 2018 so far, amidst what Liberum called a "buoyant market" for iron ore pellets

While the broker said it remained bearish on benchmark iron ore prices, it said it had become "structurally more positive" on agglomeration premiums, given rumours of further environmental closures of iron ore mines in China which aided its case on Ferrexpo.

Liberum also noted that in the near term, Chinese construction and steel rebar prices were both confirming strength in demand and mill profitability which in its view, implied that grade premiums "should move up again".

All in all, Liberum switched up its stance on Ferrexpo's stock to 'hold' from its previous 'sell' rating as it issued the firm with a 185p target price.