Metinvest iron ore concentrate output rises 3% m/m in January

The attributable production of iron ore concentrate of
Metinvest’s (METINV) subsidiaries amounted to 2.81 mmt (90.8 kt per day) in
January, according to Concorde Capital’s analysis of separate news reports by
Interfax-Ukraine. This is a 2.8% m/m increase. The holding’s pellet output was
1.04 mmt (33.5 kt per day) in January, an 8.9% m/m jump.

Production at Inhulets Iron Ore rose in January to
30.6 kt per day, or a 4.3% m/m rise. Production at Northern Iron Ore grew 1.9%
m/m to 33.3 kt per day. Production at Central Iron Ore slid 11.8% m/m to 11.3
kt per day, whereas output at Southern Iron Ore jumped 16.0% m/m to 34.0 kt per
day.

In 2017, Metinvest’s attributable output of iron ore
concentrate dropped 4.8% yoy to 31.9 mmt.

Dmytro Khoroshun: We expect
Metinvest’s 2018 attributable concentrate output to rise by up to 1% yoy to
31.9-32.2 mmt, approximately. However, if Ukrzaliznytsia, Ukraine’s state
railway company, enhances the throughput of the Kamysh-Zarya-Volnovakha raw
material supply route, which currently limits the utilization rate of
Metinvest’s two Mariupol plants to 70-80%,
then Metinvest’s mining operations will boost intra-group sales by an
additional 0.5 mmt (about 2% of the yearly production volume) of iron ore
products, which might result in a commensurate increase in yearly production
volumes.