Railway product prices slide 3% m/m in March for Ukraine exports

Ukraine export prices for railway products sold mostly
by Ukraine’s largest producer Interpipe (INTHOL) was USD 1,777/t in March, 3%
lower m/m but still 5% higher yoy, according to our analysis of State
Statistics data released on May 20.

Recall, these prices fell 4% m/m in January
after rising for more than a year, and lost a further 10% m/m in February.

Dmytro Khoroshun: The EBITDA of Interpipe’s railway product segment likely peaked in
4Q19 at USD 68 mln and will fall throughout 2020 because of two factors.
Firstly, the fall in Ukraine’s railway products export prices might extend to
as low as USD 1,200-1,400/t already this year because of the normalization of
what was an overheated market in Russia. Secondly, Russia is likely to
reinstate the 34.22% duty on railway wheel imports from Ukraine as of June 1,
which will further cut the profitability of Interpipe’s sales of railway
products.