Metinvest iron ore concentrate output slides 10% in 5M17

Metinvest’s (METINV) attributable production of iron ore concentrate amounted to 2.76 mmt in May 2016 (-6% yoy), according to Concorde Capital’s analysis of separate reports by Interfax-Ukraine. This implies its daily average output was 90.1 kt in May, or a 0.8% m/m decrease. In 5M17, Metinvest’s attributable output of iron ore concentrate fell 10% yoy to 13.3 mmt.

Andriy Perederey: The decline in Metinvest’s iron ore mining was the result of terminated shipments to the occupied territory due to a railway blockade and loss of steel production assets there, as well as a decline in output of some third party steel mills in central Ukraine. The holding needs some time to find new customers in foreign markets.

As a positive development, Metinvest’s steel output improved at Mariupol-based mills in May, which allows the holding to sell more iron ore inside the group. Therefore, we expect a recovery in iron ore output in June and we are keeping a positive view on Metinvest bonds.