Metinvest iron ore concentrate output increases 2% m/m in May

Metinvest’s (METINV) attributable production of total iron ore concentrate increased 2% m/m in May to 3.0 mmt (-7% yoy) after a 5% m/m decline in April, according to Concorde Capital’s analysis of separate reports by Interfax-Ukraine. In 5M16, output of total attributable concentrate was flat yoy at 17.2 mmt. Output of merchant attributable products was stable as well at 14.1 mmt, based on our estimates.

Roman Topolyuk: The company’s May operating performance indicates it’s falling marginally below our projections of a +1% yoy increase in output of merchant attributable projects to 35.2 mmt in 2016, but is generally stable. With iron ore prices currently firmly above USD 50/t (USD 52/t on average since January 2016), Metinvest’s mining division is contributing to its positive EBITDA. We affirm our positive stance on Metinvest’s Eurobonds.