Metinvest steel product prices stable

Ukraine FOB prices for the types of steel products
exported by Metinvest (METINV), Ukraine’s largest producer, stabilized during
Apr. 10-17, according to Metal Expert, an industry consultancy.

 

Billet prices rose 4% w/w to USD 355/t on Apr. 17, 1%
above their 2019 low of USD 350/t on Oct. 4.

 

Slab prices inched up 2% w/w to USD 325/t on Apr. 17,
3% below their 2019 low of USD 335/t on Nov. 1.

 

HRC prices were unchanged w/w at USD 363/t on Apr. 17,
1% below their 2019 low of USD 365/t on Oct. 25.

 

The prices provided by Metal Expert are sophisticated
estimates but they are not necessarily the same as the prices realized by
Metinvest for its specific products.

 

Dmytro Khoroshun: It remains
to be seen how prolonged the depression in iron and steel prices that started
in March-April will be. The situation with the coronavirus pandemic, which is
the main cause of the steel price depression, seems far from stabilizing as of
now.

 

The previous steel price slump after the
October-November 2019 minimums was rather short, with the steel prices
recovering in 1-2 months.

 

In any case, both the current and the previous price
depressions are severe in magnitude. Recall, following that slump, EBITDA of
Metinvest’s metallurgical segment plunged to negative USD 36 mln in November
and negative USD 85 mln in December.
Metinvest’s metallurgical segment losses resulted in its total EBITDA turning
negative for each of those two months. Because of the March-April price
depression, we expect Metinvest’s profitability to suffer similarly in May-June.

 

We maintain our negative view on METINV bonds.