Industrial production growth stable at 11% y-o-y in 8M10

Industrial production growth accelerated to 9.2% y-o-y in August from +6.4% y-o-y a month before, the State Statistics Committee reported yesterday. Mykyta Mykhaylychenko: The acceleration was the result of faster growth in food (+8.7% y-o-y in August) and light (+5.9%) industries, which are oriented toward domestic demand as well as on the continuing rally in machinery (+42.1% y-o-y), which is focused on the Russian and Asian, Middle Eastern markets. Metallurgy, in turn, grew 5.5% m-o-m, but was still down 1.1% y-o-y in August (slower than -6.5% y-o-y in July). We expect recovery in metallurgy production from the low volumes of June-July in coming months as average steel export prices were flat during August-September, 20% above their trough at end-June. Over 8M10, in total industrial production grew 10.9% y-o-y, almost unchanged from +11.1% in 7M10.