Metinvest steel product prices stable

Ukraine FOB prices for the types of steel products
exported by Metinvest (METINV), Ukraine’s largest producer, were stable during
June 19-26, according to Metal Expert, an industry consultancy.

 

Billet prices slid 1% w/w to USD 363/t on June 26, 4%
above their 2019 low of USD 350/t on Oct. 4 and 12% below their 1Q20 high of
USD 410/t on Jan. 10.

 

Slab prices were unchanged at USD 370/t on June 26, 10%
above their 2019 low of USD 335/t on Nov. 1 and 12% below their 1Q20 high of
USD 420/t on Jan. 17.

 

HRC were unchanged at USD 408/t on June 26, 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.

 

Pig iron prices (Metal Expert’s FOB Black Sea
assessment for a group of countries that includes Ukraine) rose to USD 315/t on
June 26, adding 5% from their June 5 level and being 11% above their 2019 low
of USD 285/t on Nov. 1 and 5% 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 12-18% in May-June after dropping
20-25% from late March to early May. Therefore, we expect the monthly EBITDA of
Metinvest’s metallurgical segment to drop in May-July from March’s USD 108 mln
(including JVs), but then to stabilize and possibly rebound in
August-September.

 

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 3Q20.

 

We maintain our negative
view on METINV bonds.