Daily steel output grows 10% mom in March

Ukrainian plants raised steel production 18% mom to 2.9 mmt (+10% mom in daily output) in March. Quarterly steel production declined 5% yoy to 8.2 mmt in the 1Q, although output of finished steel products remained flat yoy at 7.1 mmt.

Roman Topolyuk: The relative outperformance of finished products over total steel production (flat yoy vs. a 5% decline) suggests companies processed stockpiled semi-finished products, which we view as a sign of improved market demand. The stability in the finished segment is also being supported by more robust pricing: prices for steel billets and slabs added 1% and 7% mom in March. Moreover, producers are seeking to push through an additional 3% increase in April. We don’t rule out a further increase in prices, but believe any growth will be short-lived. Lingering and persistent weakness in EU markets, one of the key importers of Ukrainian steel, could spur a weakening of steel market conditions as early as May.