Egypt imposes five-year duties on Ukrainian steel rebar

Egypt’s Ministry of Trade and Industry announced the
imposition of five-year anti-dumping duties on steel rebar from China (duty
rate: 17%), Turkey (10-19%) and Ukraine (15-27%), Interfax-Ukraine reported on
Dec. 6. The news agency mentioned that Ukrainian companies that export rebar to
Egypt are Arcelor Mittal Kryvyy Rih and Metinvet (METINV).

Dmytro Khoroshun: The only
current source of Metinvest’s sales of rebar to Egypt is the resale of products
of the Dniprovsky Steel Plant, which in 2016 produced only 39 kt of rebar,
according to Metal Expert, a consultancy firm. Therefore, the impact of the
duties on Metinvest would be insignificant. Yet it would be significant for
Ukraine as the country exported a total of 654 kt (at USD 224 mln revenue) of
rebar to Egypt in 2016, according to our analysis of Ukrainian State Statistics
Service data.

Metal Expert’s data indicates that in 2016, Ukraine produced
3.0 mmt of rebar, about 87.2% of which was produced by Arcelor Mittal Kryvyy
Rih and 11.5% by Makiyivka Steel, which was under Metinvest’s control during
2016 (Metinvest announced losing control of Makiyivka Steel in March 2017).
Therefore, we think that Egypt’s duties would substantially impact Arcelor
Mittal Kryvyy Rih, but the effect on Metinvest would be minimal.

We are keeping our neutral view on METINV
Eurobonds.