Metinvest attributable steel output falls 4% m/m in April

Attributable steel production at Ukraine’s largest producer, Metinvest (METINV), fell 3.7% m/m to 25.3 kt per day, according to a Concorde Capital analysis of separate news reports by Interfax-Ukraine. It includes Azovstal (AZST UK), Illich Steel (MMKI UK) and a 49.9% portion of Zaporizhstal’s (ZPST UK) result (accounted for as a JV). Production at Yenakiyeve Steel was halted on Feb. 20.

The two Mariupol-based steel mills decreased production by 4.9% m/m in April to 20 kt per day. This includes Ilyich Steel, (-1.3% m/m to 8.4 kt per day), and Azovstal (-7.3% m/m to 11.6 kt per day). Zaporizhstal produced 10.6 kt per day of steel, which is 0.9% better m/m.

In 4M17, Metinvest produced 3.37 mmt of steel, or 1.0% less yoy.

In other news, Metinvest reported on May 15 that its biggest coke plant, Avdiyivka Coke (AVDK UK), got a new electricity line that makes the plant independent of power supplies form the occupied part of Donbas. Before that, the plant’s work was unstable due to frequent damage to the power line coming from separatist-controlled territory. Improved power supply to the plant allowed it to increase the production of metallurgical coke.  

Andriy Perederey: The holding’s April results were lower due to output decreases at Mariupol-based steel mills. The key problems were related to supplies of coke and some other raw materials due to bottlenecks on railroads near Mariupol, where Ukrainian Railway was undertaking some reconstruction works, as well as unstable operations at Avdivivka Coke. Now that these issues have been resolved, Metinvest has a good chance to increase its steel production in Mariupol. We are keeping our positive view on Metinvest bonds, which are now trading at 94-95% of par.