Metinvest iron ore concentrate output increases 9% yoy in March

Ukraine’s largest steelmaker Metinvest (METINV) increased by 8% m/m and 9% yoy the attributable production of iron ore concentrate to 3.1 mmt in March (including a 45.9% portion of Southern Iron Ore’s output), according to our analysis of separate reports by Interfax-Ukraine. Metinvest increased by 5% yoy the attributable production of total concentrate to 8.8 mmt in 3M16, and merchant iron ore product output also grew 5% to 8.5 mmt, we estimate.

Roman Topolyuk: Metinvest has been increasing the yoy output of its iron ore products since February amid improving internal demand from the holding’ steel plants (attributable steel production grew 16% yoy to 2.5 mmt in 3M16) and recovering markets abroad. Iron ore prices advanced 46% YTD to USD 64.77/t, bringing its mining division back to profit after losses in December-January, we estimate.

The monthly iron ore production supports our expectation of 35.2 mmt (+1% yoy) of attributable merchant iron ore products output by Metinvest in 2016. We reiterate our bullish view on Metinvest’s bonds.