Metinvest steel output drops 6% m/m in September

Steel production at Ukraine’s largest producer
Metinvest (METINV) was 23.7 kt per day (or 710 kt per month) in September, a 5.9%
m/m decrease, according to Concorde Capital’s analysis of separate news reports
by Interfax-Ukraine.

Ilyich Steel reported a 3.3% m/m gain in steel
production to 12.3 kt per day, while Azovstal’s output retreated 14.3% m/m to 11.3
kt per day in September. The holding’s hot iron output dropped 7.2% m/m to 24.1
kt per day.

In 9M20, Metinvest’s steel output was 6.16 mmt (22.5
kt per day), or 4.4% more yoy.

Azovstal shut down its oxygen converter No. 2 in
mid-September, with the 45-day planned repairs to last until at least
end-October, according to an Oct. 5 report by Interfax-Ukraine.

Dmytro Khoroshun: The drops
in Metinvest’s m/m daily iron and steel production rates are explained by the
repairs at Azovstal. The repairs might also result in its daily steel
production volume dropping to 19-21 kt in October, or 10-20% less m/m.

We maintain our neutral view on METINV bonds.