Metinvest steel output decreases 11% m/m in July

Steel production at Ukraine’s largest producer, Metinvest
(METINV), was 19.1 kt per day (or 591 kt per month) in July, an 11.2% m/m
decrease in average daily terms, according to Concorde Capital’s analysis of
separate news reports by Interfax-Ukraine. That result includes Azovstal (AZST
UK) and Ilyich Steel (MMKI UK) figures. (Production at Metinvest’s Yenakiyeve
Steel was halted in February 2017). No attributable portion of Zaporizhstal’s
(ZPST UK) result is included.

Ilyich Steel reported a 0.3% m/m rise in steel
production to 9.2 kt per day, while Azovstal output dropped 19.7% m/m to 9.9 kt
per day.

The holding’s hot iron output decreased 7.2% m/m to
22.1 kt per day in July.

During 7M18, Metinvest’s steel output was 4.37 mmt, or
3.7% less yoy. Excluding Yenakiyeve Steel, which Metinvest does not control
anymore, the holding’s output rose 4.1% yoy in 7M18.

Dmytro Khoroshun: The steel
production of 19.1 kt per day in July was above our 17.4 kt per day estimate that
considered the 27-day repairs of Azovstal’s oxygen converter No. 2
that started on June 26. Azovstal reportedly had plans to repair its other
oxygen converter, No. 1, in August.

We expect Metinvest’s 2018 steel output at about
7.3-7.5 mmt, or 3-5% less yoy.