Metinvest iron ore concentrate output slides 4% yoy in April

Metinvest’s (METINV) attributable production of iron ore concentrate was 2.9 mmt in April (including a 45.9% portion of Southern Iron Ore’s output), according to Concorde Capital’s analysis of separate reports published by Interfax-Ukraine on May 20. This is a 4% yoy and 5% m/m decrease, respectively.

As the operating performance of the holding in the first months of 2016 was strong, its attributable production of total concentrate grew 3% yoy to 11.8 mmt in 4M16 and its output of attributable merchant iron ore products increased 2% yoy to 11.3 mmt.

Roman Topolyuk: The operating result of Metinvest’s iron ore mining in April comes in slightly below our projections, though we are keeping the forecast of its attributable merchant iron ore output in 2016 unchanged at 35.2 mmt (+1% yoy).

Average iron ore prices in China since the beginning of the year have been at USD 52.3/t, or 7% higher than we estimated for full year 2016 (USD 49/t). Metinvest’s mining division will benefit from that, given iron ore prices stay at their current level. We reiterate our bullish view on Metinvest bonds.