Metinvest steel output falls 9% m/m in November

Attributable steel production at Ukraine’s largest steel producer Metinvest (METINV) fell 9% m/m to 808 kt in November owing to repairs and lower availability of railway rolling stock, according to Concorde Capital’s analysis of separate news reports of Interfax-Ukraine. This includes Azovstal (AZST UK), Ilyich Steel (MMKI UK), Yenakiyeve Steel (ENMZ UK) and a 49.9% portion of Zaporizhstal’s result (accounted for as a JV). In 11M16, Metinvest’s attributable steel production was 9.5 mmt (+6% yoy).

Andriy Perederiy: The operating performance of Metinvest’s subsidiaries is below our projections of flat m/m performance. Despite Ukrainian Railways having removed logistics bottlenecks, railway connections are unstable from time to time. Nevertheless, we are sticking to our estimate of Metinvest’s total attributable steel production (including JVs not disclosed in the production report) in 2016 at 10.5 mmt (9% yoy). We maintain our bullish view on METINV Eurobonds.