Metinvest iron ore concentrate output rises 3% in 5M19

The attributable production of iron ore concentrate at
the subsidiaries of Metinvest (METINV), Ukraine’s largest steel producer,
amounted to 2.85 mmt (91.9 kt per day) in May, according to Concorde Capital’s
analysis of separate news reports by Interfax-Ukraine. This is a 1.4% m/m loss
on a daily average basis. The holding’s pellet output was 791 kt in May, a
13.1% m/m drop on a daily average basis.

Concentrate production at Inhulets Iron Ore gained
0.3% m/m in May to a daily rate of 31.2 kt. Production at Northern Iron Ore
slid 1.1% m/m to 33.8 kt per day. Production at Central Iron Ore dropped 4.3%
m/m at 11.4 kt per day, whereas output at Southern Iron Ore decreased 3.2% m/m to
33.8 kt per day.

In 5M19, Metinvest’s attributable output of iron ore
concentrate rose 3.3% yoy to 13.93 mmt, or 92.3 kt per day.

Dmytro Khoroshun: It is
possible that the drop in May’s concentrate and pellet production is due to the shutdowns of two blast furnaces at Azovstal
and an oxygen converter at Ilyich Steel
in late May-early June, and that Metinvest’s iron ore production will have
decreased further in June.

We maintain our estimate for Metinvest’s 2019
attributable iron ore concentrate output at 33 mmt (91 kt per day), or 4-5%
more yoy. The recent management guidance for
Metinvest’s subsidiaries (excluding Southern Iron Ore) is for a 4-5% yoy
increase, or by 1.2-1.3 mmt.