Metinvest steel output drops 17% m/m in October

Steel production at Ukraine’s largest producer,
Metinvest (METINV), was 16.7 kt per day (or 519 kt per month) in October, a
16.8% m/m plunge in average daily terms, according to Concorde Capital’s analysis
of separate news reports by Interfax-Ukraine. That result includes Azovstal
(AZST UK) and Ilyich Steel (MMKI UK) figures. (Production at Metinvest’s
Yenakiyeve Steel was halted in February 2017). No attributable portion of
Zaporizhstal’s (ZPST UK) result is included.

Ilyich Steel reported a 1.4% m/m drop in steel
production to 8.5 kt per day, while Azovstal’s output lost 28.5% m/m to 8.2 kt
per day.

The holding’s hot iron output gained 3.9% m/m to 20.4
kt per day in October.

During 10M18, Metinvest’s steel output was 6.10 mmt,
or 5.6% less yoy. Excluding Yenakiyeve Steel, which Metinvest does not control
anymore, the holding’s output slid 0.3% yoy in 10M18.

Azovstal stopped for repairs to oxygen converter No. 1
on Sept. 24, planning to restart it in mid-November, according to
Interfax-Ukraine, which sited a local corporate newspaper.

Dmytro Khoroshun: The October
drop of steel production at Azovstal due to planned repairs of oxygen converter No. 1
(started on Sept. 24, to end in November) to 8.2 kt per day was smaller than to
the 6.0 kt per day that we expected, which is positive. Metinvest’s steel
production in November will likely rebound from the October levels.

We expect Metinvest’s 2018 steel output at about
7.2-7.4 mmt, or 3-6% less yoy.