Metinvest iron ore concentrate output rises 6% in 8M19

The attributable production of iron ore concentrate at
the subsidiaries of Metinvest (METINV), Ukraine’s largest steel producer,
amounted to 3.01 mmt (97.2 kt per day) in August, an 8.1% m/m gain, according
to Concorde Capital’s analysis of separate news reports by Interfax-Ukraine.
The holding’s pellet output was 1,083 kt in August, a 5.1% m/m gain.

Concentrate production at Inhulets Iron Ore jumped
18.0% m/m in August to a daily rate of 34.0 kt. Production at Northern Iron Ore
increased 6.0% m/m to 35.6 kt per day. Production at Central Iron Ore gained
0.5% m/m to 12.1 kt per day, whereas output at Southern Iron Ore increased 0.3%
m/m to 33.8 kt per day.

In 8M19, Metinvest’s attributable output of iron ore
concentrate rose 5.6% yoy to 22.48 mmt, or 92.5 kt per day.

Dmytro Khoroshun: August’s
concentrate production rate, 97.2 kt per day, was the highest since the
beginning of 2016, significantly above the previous high of 93.2 kt per day in
April 2019.

We upgrade our estimate for Metinvest’s 2019
attributable iron ore concentrate output to 33.3-34.2 mmt (91-94 kt per day),
or 5-8% more yoy. The management guidance for Metinvest’s subsidiaries (excluding
Southern Iron Ore) is for a 4-5% yoy increase, or by
1.2-1.3 mmt.

We maintain our bullish view on METINV bonds.