Railway product prices drop 10% m/m in February for Ukraine exports

Ukraine export prices for railway products sold mostly
by Ukraine’s largest producer Interpipe (INTHOL) was USD 1,841/t in February,
10% lower m/m but still 13% higher yoy, according to our analysis of UkrStat
data released on Apr. 21.

Recall, in January this price fell 4% m/m to USD 2,046/t after rising
for more than a year.

The railway product UkrStat group – for which Concorde
Capital calculated its price – consists 80-100% of Interpipe railway products,
mostly wheels. For example, in 2019 Ukraine exported 187 kt of such railway
products, while Interpipe exported 158 kt (84% of Ukraine’s total). Therefore,
up to 20% of this group consists of products other than Interpipe’s, such as
axles by other producers. Nevertheless, the average prices for this product
group of Ukraine’s exports should capture some of the dynamics of prices for
Interpipe products.

Dmytro Khoroshun: The railway
product price drops in January and February suggest the EBITDA of Interpipe’s
railway product segment will drop from USD 68 mln in 4Q19.

Starting from March-April, railway product prices
will likely experience a further slowdown due to the coronavirus pandemic.