Metinvest steel product prices extend their climb

The rise in Ukraine FOB prices for the types of steel
products exported by Metinvest (METINV), Ukraine’s largest producer, continued
during June 5-12, according to Metal Expert, an industry consultancy.

 

Billet prices inched up 2% w/w to USD 370/t on June
12, 6% above their 2019 low of USD 350/t on Oct. 4 and 10% below their 1Q20
high of USD 410/t on Jan. 10.

 

Slab prices advanced 4% w/w to USD 365/t on June 12,
9% above their 2019 low of USD 335/t on Nov. 1 and 13% below their 1Q20 high of
USD 420/t on Jan. 17.

 

HRC prices added 4% w/w to USD 408/t on June 12, 12%
above their 2019 low of USD 365/t on Oct. 25 and 15% below their 1Q20 high of
USD 478/t on Feb. 21.

 

Metal Expert did not provide a price assessment for
pig iron for June 12. Metal Expert’s pig iron prices (FOB Black Sea for a group
of countries that includes Ukraine) were at USD 300/t on June 5, 5% above their
2019 low of USD 285/t on Nov. 1 and 10% 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: Ukraine’s
FOB iron and steel prices have rebounded 12-16% from their recent April-May
lows, and have the potential to rise further on strong demand from China and
growing iron ore prices on the global market.

 

European demand for Ukrainian steel might also be
boosted because of the reopening of the region’s economies after quarantines
are relaxed. The euro’s appreciation against the U.S. dollar during the last
month also allows the Ukrainian suppliers to maintain and increase their USD-denominated
prices for offers to Europe.

 

We maintain our negative view on METINV bonds.