Ukraine FOB prices for the types of iron and steel
products exported by Metinvest (METINV), Ukraine’s largest producer, slid
during Oct. 2 – 9, according to Metal Expert, an industry consultancy.
Pig iron prices (Metal Expert’s FOB Black Sea
assessment for a group of countries that includes Ukraine) dropped 2% w/w to
USD 358/t on Oct. 9, 8% above their 1Q20 high of USD 333/t on Mar. 20.
Billet prices were flat w/w on Oct. 9 after dropping
1% during Sept. 25 – Oct 2 to USD 403/t, 2% below their 1Q20 high of USD 410/t
on Jan. 10.
Slab prices lost 2% w/w to USD 450/t on Oct. 9, 7%
above their 1Q20 high of USD 420/t on Jan. 17.
HRC prices slid 1% w/w to USD 485/t on Oct. 9, 2%
above their 1Q20 high of USD 478/t on Feb. 21.
The prices provided by Metal Expert are sophisticated
estimates, but they are not necessarily the same as the prices realized by
Metinvest for its specific products.
Dmytro Khoroshun: Ukraine’s
FOB iron and steel prices rebounded strongly in May-September. Therefore, we
expect the monthly EBITDA of Metinvest’s metallurgical segment (including JVs)
in August-October to be at least at its July level of USD 57 mln.
However, the strong iron ore prices at the global
markets, which were one of the reasons for the recent rebound in iron and steel
prices, will keep the profitability of Metinvest’s metallurgical division
subdued throughout 2H20.
We maintain our neutral view on METINV bonds.