Steel Pipe Production Down 13.7% yoy in 3M08
———————————————————————————–
Company, ths mt 3M07 3M08 Chg, %
———————————————————————————–
Novomoskovsk Pipe (NVTR: U/R) 51.4 87.8 70.8
Kominmet (DMZK: U/R) 41.0 57.7 40.7
Nyzhnyodniprovsk Pipe (NITR: U/R) 156.8 155.1 -1.1
Dnipropetrovsk Pipe (DTRZ: U/R) 51.5 40.1 -22.1
Khartsyzk Pipe (HRTR: SELL) 175.5 33.4 -81.0
Other 207.5 216.2 15.2
————————————————————————————
Total 683.7 590.2 -13.7
Eugene Cherviachenko: The outstanding growth at Novomoskovsk Pipe is due to a low comparison base, the company’s production is approaching our target of 311 mln mt in 2008. Kominmet boosted production due to a new pipe production line it launched in late 2007 (see our report of Jan. 28, 2008); its 1Q07 results are in line with our forecasts (230 ths mt in 2008; +25% yoy). Production at Nyzhnyodniprovsk Pipe is 4% below our projections. Khartsyzk Pipe’s sharp decline in production confirmed our negative view on the stock. Production at Dnipropetrovsk Pipe was 32% below what we expected. The recent market correction prompts us to put our recommendations for the stocks under review, excluding HRTR (SELL).