Metinvest iron ore concentrate output rises 5% in 1Q20

The attributable production of iron ore concentrate at
the subsidiaries of Metinvest (METINV), Ukraine’s largest steel producer,
amounted to 3.04 mmt (98.1 kt per day) in March, according to Concorde
Capital’s analysis of separate news reports by Interfax-Ukraine. This is a 1.5%
m/m gain on a daily average basis. The holding’s pellet output was 864 kt in
March, a 14.6% m/m jump on a daily average basis.

Concentrate production at Inhulets Iron Ore gained
2.2% m/m in March to a daily rate of 35.4 kt. Production at Northern Iron Ore
slid 1.0% m/m to 34.6 kt per day. Production at Central Iron Ore increased 6.8%
m/m to 13.2 kt per day, whereas output at Southern Iron Ore improved 1.3% m/m
to 32.5 kt per day.

In 1Q20, Metinvest’s attributable output of iron ore
concentrate rose 5.2% yoy to 8.72 mmt, or 95.8 kt per day.

Dmytro Khoroshun: We
tentatively expect Metinvest to produce 33.7 mmt (92 kt per day) of iron ore concentrate
in 2020, or 1% more yoy (including the attributable share of Southern Iron Ore
volume). However, if the situation at the iron ore and steel markets
deteriorates, Metinvest’s iron ore production in 2020 might drop up to 8% yoy
to 30.5 mmt (83 kt per day).

At a recent conference call with investors,
Metinvest’s CEO said the holding expects its total iron ore concentrate
production (excluding Southern Iron Ore) will remain at the 2019 level.

We maintain our negative view on METINV bonds.