Metinvest iron ore concentrate output rises 7% m/m in July

The attributable production of iron ore concentrate of
Metinvest’s (METINV) subsidiaries amounted to 2.76 mmt in July, according to
Concorde Capital’s analysis of separate news by Interfax-Ukraine. This is 7.5%
m/m growth on a daily average basis compared to June, and a 3.3% decrease yoy.

The monthly results imply that Metinvest’s
attributable output of concentrate decreased 9.3% yoy to 18.59 mmt in 7M17.

Andriy Perederey: July’s
increase in Metinvest’s attributable iron ore output was impacted by the low
level of production in the previous month (daily average output was 83.8 kt in
June, while daily average output in 7M17 was 87.7 kt). We expect Metinvest will
produce about 32 mmt of attributable iron ore in 2017, a 2.6% yoy decrease.

However, the smaller output will be compensated by
much better yoy iron ore prices (USD 73.4/t in 7M17, on average, or 38.8% yoy
higher), which will secure an increase in Metinvest’s mining EBITDA this year.
We are keeping our positive view on Metinvest bonds.