Metinvest boosts steel product output 6% qoq in 1Q13

Metinvest (METINV) ramped up its steel production 8% qoq in 1Q13 to 3.1 mmt, which however amounted to a 6% yoy decline, according to the company’s operating results published on May 24. Total output of steel products grew 6% qoq and 1% yoy to 2.98 mmt, largely owing to finished rolled steel production increasing 5% yoy and 14% qoq on the back of increased flat product orders, as well as boosted slab output of 14% yoy and 43% qoq. Metinvest increased total iron ore concentrate production by 1% yoy and 3% qoq to 9.3 mmt, while output of merchant iron products grew even more significantly – by 8% yoy and 7% qoq to 5.8 mmt.

Roman Topolyuk: Metinvest’s 1Q13 operating performance – weaker yoy and stronger qoq – was in line with its CIS peers and the global steel market trend that was marked by a qoq boost in prices and demand after a weak 2012. Severstal boosted crude steel output 7% qoq in 1Q13, which fell 4% yoy; Evraz reported +11% qoq and -6% yoy steel production. The increase of iron ore products output for third parties against a 23% qoq surge in global spot prices will provide support to Metinvest’s financials in 1Q13. However, sliding iron ore and finished steel product prices in 2Q13 could reverse these gains in the next quarter’s financial statements.