Metinvest steel output adds 1% qoq in 4Q21

Ukraine’s largest steelmaker Metinvest (METINV)
reported on Feb. 1 a 1% qoq increase in steel production at its subsidiaries to
2.600 mmt in 4Q21.

 

Azovstal’s output lost 10% qoq to 0.991 mmt in 4Q21,
while Ilyich Steel’s output slid 2% qoq in 4Q21 to 1.061 mmt, according to the
holding’s quarterly operational update. The qoq drop in steel production at the
Mariupol plants in 4Q21 was due to lower hot iron output caused by the
optimization of production costs given elevated energy costs, the update said.

 

Steel output at Dnipro Coke, which became a steel
producer in August as a result of its acquisition of Dniprovskyy Steel assets,
was 548 kt in 4Q21.

 

Year-on-year, Metinvest’s 2021 crude steel output
added 15% to 9.533 mmt.

 

The holding’s hot iron output in 4Q21, 2.653 mmt, was
unchanged qoq, and the 2021 volume rose 15% yoy to 9.709 mmt.

 

The 4Q21 output of semi-finished products at Metinvest
dropped 7% qoq, or 69 kt, to 946 kt as slab production lost 137 kt, which was
partially compensated by an 83 kt increase in billet production due to the
consolidation of Dnipro Coke volumes from August.

 

The holding’s finished product output inched up 1%
qoq, or 23 kt, in 4Q21 to 1.886 mmt due to a 57 kt rise in flat product output
to 1,547 kt, partially set off by a 37 kt drop in long product output to 301
kt.

 

For 2021, Metinvest’s output of semi-finished products
added 3% yoy to 3.411 mmt while its finished product output jumped 23% yoy to
7.233 mmt.

 

Total coke production was unchanged qoq at 1.090 mmt
in 4Q21, while merchant coke output plunged 47% qoq to 212 kt. For 2021, total
coke production decreased 5% yoy to 4.551 mmt, while merchant coke output
dropped 22% yoy to 1.603 mmt.

 

Total 4Q21 iron ore concentrate production lost 2% qoq
to 7.663 mmt, whereas output of merchant iron ore products rose 9% qoq to 4.060
mmt due to a 27% qoq rise in merchant iron ore concentrate production to 3.101
mmt partly set off by a 24% decrease in merchant pellet production to 0.959
mmt. Total 2021 iron ore concentrate production rose 3% yoy to 31.341 mmt,
whereas the output of merchant iron ore products dropped 8% yoy to 17.530 mmt.

 

Production of coking coal concentrate at Metinvest
added 10% qoq to 1.487 mmt in 4Q21. In 2021, coking coal concentrate output
jumped 92% yoy to 5.542 mmt due to the consolidation of Pokrovske coal business
from March.

 

Dmytro Khoroshun: Metinvest’s
steel production volumes might suffer in 1Q22 following weak December output at 27.4 kt per day.

 

The 4Q21 steel production at Metinvest’s two Mariupol
plants, Azovstal and Ilyich Steel, dropped 6% qoq in 4Q21, we calculate, and we
do not exclude a further drop in 1Q22. The high energy costs, which Metinvest
cited as a reason for low steel production in Mariupol, will remain a factor in
the coming months, we think.

 

The slight 1% qoq increase in steel production at all
three of Metinvest’s steelmakers was due to Dnipro Coke’s output being
consolidated during three months in 4Q21 but only during two months in 3Q21.
Dnipro Coke’s contribution to daily steel production in 4Q21, 6.0 kt, was down
6% qoq accounting for the consolidation period, we calculate.

 

Nevertheless, we do expect an eventual rebound of
daily steel production at Metinvest to at least 29-30 kt from 28.3 kt in 4Q21.