Metinvest increases attributable steel output 14% m/m in March

Ukraine’s largest steelmaker Metinvest (METINV) increased its attributable steel production in March (including a 49.9% portion of Zaporizhstal’s output) by 14% m/m to 920 kt, according to our analysis of separate reports by the Interfax-Ukraine news agency. Azovstal contributed the most to the improvement of its operating performance (+38% m/m, to 326 kt), while Yenakiyeve Steel’s output increased 14% m/m to 180 kt.

On a yoy basis, Metinvest’s attributable steel production grew 32% in March, resulting from 20% production growth at Ilyich Steel (MMKI UK), 17% production growth at Azovstal (AZST UK) and more than tripled growth at Yenakiyeve Steel (ENMZ UK), which had extremely low volume of 48 kt a year ago owing to active warfare in the region. 

As a result, Metinvest’s attributable steel output grew 16% yoy to 2.485 mmt in 3M16.

Roman Topolyuk: March’s steep production advance is attributable to a sharp recovery of steel prices (+32-55% since January 2016), which have brought Metinvest back to solid earnings, we estimate. We upgrade our projection of attributable steel production to 10.4 mmt in 2016 (+8% yoy) from our previous estimate of 10.1 mmt. This supports our bullish view on METINV notes.