Metinvest steel output plunges 33% m/m in April

Steel production at Ukraine’s largest producer
Metinvest (METINV) was 15.6 kt per day (or 469 kt per month) in April, a 32.6%
m/m loss, according to Concorde Capital’s analysis of separate news reports by
Interfax-Ukraine.

Ilyich Steel reported a 35.7% m/m drop in steel
production to 7.8 kt per day, while Azovstal’s output retreated 29.2% m/m to
7.8 kt per day in April. The holding’s hot iron output decreased 23.7% m/m to
18.2 kt per day.

In 4M20, Metinvest’s steel output was 2.64 mmt (21.8
kt per day), or 0.9% less yoy.

Dmytro Khoroshun: April’s
daily steel production rate at Metinvest was even slightly worse than the 16-20 kt we expected.

We expect Metinvest’s May daily steel output to be as
depressed as in April because of Ukraine’s export steel price slump that started in late March and is still ongoing.

The restart of Metinvest’s Italian
rerolling plants in April might boost steel production
at Metinvest’s Mariupol plants in May, but these effects will likely be
overwhelmed by the plunge in prices.

We maintain our negative view on METINV bonds.