Metinvest steel product prices extend depression

Ukraine FOB prices for the types of steel products
exported by Metinvest (METINV), Ukraine’s largest producer, remained depressed
during Apr. 24 – May 1, according to Metal Expert, an industry consultancy.

Billet prices dropped 4% w/w to USD 338/t on May 1, 4%
below their 2019 low of USD 350/t on Oct. 4 and 18% below their 1Q20 high of
USD 410/t on Jan. 10.

Slab prices were unchanged w/w at USD 328/t on May 1,
2% below their 2019 low of USD 335/t on Nov. 1 and 22% below their 1Q20 high of
USD 420/t on Jan. 17.

Metal Expert did not provide a price assessment for
HRC for May 1. HRC prices were at USD 363/t on Apr. 24, 1% below their 2019 low
of USD 365/t on Oct. 25 and 24% below their 1Q20 high of USD 478/t on Feb. 21.
Metal Expert’s Russia HRC export prices (FOB Black Sea) dropped 3% w/w to USD
355/t on May 1, 6% below their 2019 low of USD 378/t on Oct. 25 and 27% below
their 1Q20 high of USD 488/t on Jan. 17.

Metal Expert did not provide a price assessment for
pig iron for May 1. Metal Expert’s pig iron prices (FOB Black Sea for a group
of countries that includes Ukraine) were at USD 278/t on Apr. 24, 3% below
their 2019 low of USD 285/t on Nov. 1 and 17% below their 1Q20 high of USD 333/t
on Mar. 20.

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: The current
deep slump in iron and steel prices (down 15-25% from their 1Q20 highs) has
entered its second month, with no clear reason for a rebound on the horizon.
This indicates the likely depression in Metinvest’s profitability during
May-June and possibly further into 3Q20.

We maintain our negative view on METINV bonds.