Ferroalloys Output Accelerates.

Ferroalloys output increased 48% yoy in August, up from July’s 32% yoy gain. Nikopol Ferroalloy (NFER: Susp) again saw the fastest increase, followed by Zaporizhya Ferroalloy (ZFER: BUY), which remained the growth leader ytd. Total output was up 2.2% yoy in 8M06, as the recent gains overcame a drop in output in 1Q06. Eugene Cherviachenko: The interim dynamics are in line with our 2006 forecasts for ZFER. We expect Stakhanov Ferroalloy (SFER: BUY) to catch up thanks to the awakening domestic steel market. We leave our production forecasts and our target prices for ZFER and SFER unchanged.

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                      Jan-Aug   chg   August   chg    July    chg

                       ths mt   yoy   ths mt   yoy   ths mt   yoy

Nikopol             566      2%     81      60%    75     37%

Zaporizhya        345     12%     45      44%    47     33%

Stakhanov         123     -9%     13      11%    14     19%

Total                1044      2%    139      48%   137     32%

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Note: Total includes Kramatorsk Metallurgy Plant

Source: Ukrainske Novosti