Metinvest iron ore concentrate output drops 2.7% in February

The attributable production of iron ore concentrate of
Metinvest’s (METINV) subsidiaries amounted to 2.47 mmt (88.4 kt per day) in
February, according to Concorde Capital’s analysis of separate news reports by
Interfax-Ukraine. This is a 12.1% m/m decrease, or a 2.7% m/m drop on a daily
average basis. The holding’s pellet output was 787 kt in February, a 25.0% m/m
fall (or a 16.9% m/m drop on a daily average basis).

Production at Inhulets Iron Ore slid in February to
the daily rate of 30.1 kt, or a 1.9% m/m drop. Production at Northern Iron Ore
decreased 4.0% m/m to 31.9 kt per day. Production at Central Iron Ore rose 0.6%
m/m to 11.4 kt per day, whereas output at Southern Iron Ore fell 3.8% m/m to
32.7 kt per day.

In 2M18, Metinvest’s attributable output of iron ore
concentrate rose 4.4% yoy to 5.29 mmt.

Dmytro Khoroshun: We expect
Metinvest’s 2018 attributable concentrate output to rise by up to 2% yoy to
32.0-32.5 mmt, approximately.

We maintain our Speculative Buy recommendation on
the Metinvest Eurobond on expectations of a deal (restructuring or refinancing)
in the near future. For more details, please refer to our March 1 report on
Metinvest.