Metinvest steel output drops 2.3% m/m in May

Steel production at Ukraine’s largest producer Metinvest
(METINV) was 23.6 kt per day (or 732 kt per month) in May, a 2.3% m/m decrease,
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.

Ilyich Steel reported a 9.0% m/m loss in steel
production to 10.3 kt per day, while Azovstal’s output rose 3.5% m/m to 13.4 kt
per day in May. The holding’s hot iron output slid 3.9% m/m to 24.0 kt per day.

In 5M19, Metinvest’s steel output was 3.40 mmt, or
8.3% more yoy.

Dmytro Khoroshun: Metinvest
has demonstrated strong steel production volumes so far in 2019, averaging 22.5
kt per day. We expect Metinvest’s 2019 steel production to reach 8.0-8.3 mmt,
up 9-14% yoy. The management’s recent guidance for 2019 was 8.32 mmt
 (up 14% yoy). We maintain our bullish view on METINV bonds.