Metinvest shuts down blast furnace at Azovstal

Ukraine’s largest steel producer Metinvest (METINV)
started shutting down blast furnace (BF) No. 5 on June 5, according to rbc.ua,
a news site, which cited Metinvest’s press service.

Dmytro Khoroshun: After this
shutdown, Azovstal will be operating three BFs: No. 2 (1.1 mmt of hot iron
p.a.), No. 4 (1.3 mmt p.a.), and No. 6 (1.1 mmt p.a.), with a total hot iron
capacity of 3.5 mmt p.a. This should allow for maximum steel production of
about 4.0 mmt p.a., or 11.0 kt per day. This is below Azovstal’s steel
production rates in the recent months (April: 12.9 kt per day, May: 13.4 kt per
day).

In the coming weeks, Azovstal should launch BF No. 3 (1.3-1.6 mmt
p.a.) and shut down BF No. 6, which should increase the plant’s total hot iron
capacity to 3.7-4.0 mmt p.a. (maximum steel production of about 4.2-4.55 mmt
p.a., or 11.5-12.5 kt per day).

Provided Ilyich Steel keeps producing steel at the
10.5-11.0 kt per day rate (5M19 average: 10.7 kt per day), Metinvest’s total
steel production should keep up at 22.0-23.5 kt per day, or 8.0-8.6 mmt p.a.

We maintain our bullish view on METINV bonds.