Metinvest to shut down converter at Azovstal in June-July

Ukraine’s largest steel producer Metinvest (METINV)
plans to shut down for 27 days of repairs oxygen converter No. 2 at its
Mariupol-based plant Azovstal on June 26, according to a June 4 Mariupolskoye
TV interview by Azovstal’s CEO Enver Tskitishvili.

Recall, Azovstal shut down converter No. 2 for planned
repairs as recently as in February. The repairs
lasted a few weeks, and Azovstal’s output was back to normal in March.

Dmytro Khoroshun: Each of
Azovstal’s two converters, which comprise the plant’s entire steelmaking
capacity, are able to produce up to 7.3 kt of steel per day and had recently
been producing at a rate of about 6.8 kt per day. Because of the converter
shutdown planned for June-July, we estimate that Metinvest’s steel output
should drop by 4% m/m to 21.5 kt per day in June and further by 19% m/m to 17.4
kt per day in July. The total loss of steel production because of the June-July
repairs will amount to 180 kt, approximately.

We are keeping our forecast of Metinvest’s 2018
steel output at about 7.3-7.5 mmt, or 3-5% less yoy.