Metinvest steel output jumps 13% qoq in 1Q19

Ukraine’s largest
steelmaker Metinvest (METINV) reported on Apr. 26 a 13% qoq increase in steel
production to 1.941 mmt at its subsidiaries in 1Q19. Azovstal’s output rose 7%
qoq to 974 kt in 1Q19, while Ilyich Steel’s output jumped 19% qoq in 1Q19 to
967 kt due to the launch of continuous casting machine No. 4, according to the
holding’s operational update. Year-on-year, Metinvest’s 1Q19 crude steel output
rose 6% due to a 20% yoy jump at Ilyich Steel that was partially offset by a 5%
yoy drop at Azovstal.

The holding’s hot
iron output in 1Q19, 1.957 mmt, slid 1% qoq and was down 9% yoy due to
irregular supplies of raw materials, Metinvest said.

The 1Q19 output of
semi-finished products at Metinvest dropped 14% qoq to 623 kt as its merchant
pig iron output plunged 50% qoq to 225 kt, but its slab output jumped 47% qoq
to 398 kt. Metinvest noted that the 128 kt qoq increase in slab output was
mostly due to a 100 kt rise at Azovstal.

The holding’s
finished product output rose 10% qoq in 1Q19 to 1.501 mmt due to an 11% qoq
rise in hot-rolled plate output to 886 kt, a 32% qoq gain in galvanized coil
output to 96 kt, and a 12% qoq increase in hot-rolled coil output to 212 kt.
Year-on-year, finished product output rose 2%.

Total coke
production in 1Q19 dropped 7% qoq to 1.269 mmt, while merchant coke output lost
20% qoq to 392 kt.

Total 1Q19 iron ore
concentrate production rose 6% qoq to 7.204 mmt, whereas output of merchant
iron ore products jumped 17% qoq to 4.438 mmt due to a 19% qoq increase in
merchant iron ore concentrate production to 2.446 mmt and a 15% qoq increase in
merchant pellet production to 1.992 mmt. Year-on-year, iron ore concentrate
output rose 4%, and merchant iron ore product production jumped 23%.

Dmytro Khoroshun: We see as positive the increases,
both qoq and yoy, in Metinvest’s production of crude steel and finished
products (helped by the launch of CCM No. 4 at Ilyich Steel) and iron ore
products (especially merchant). The next few months will indicate whether Metinvest
is on schedule to boost its steel production 14% yoy to 8.3 mmt and to increase
iron ore concentrate output by 4-5% to 28.6-28.7 mmt in 2019, as guided by the management in March.