Metinvest steel output rebounds 22% qoq in 3Q20

Ukraine’s largest steelmaker Metinvest (METINV)
reported on Nov. 3 a 22% qoq jump in steel production at its subsidiaries to 2.188
mmt in 3Q20. Azovstal’s output gained 18% qoq to 1.101 mmt in 3Q20, while
Ilyich Steel’s output surged 27% qoq in 3Q20 to 1.087 mmt, according to the
holding’s quarterly operational update. Year-on-year, Metinvest’s 9M20 crude
steel output added 4% due to a 6% yoy gain at Ilyich Steel and a 3% advance at
Azovstal.

 

The holding’s hot iron output in 3Q20, 2.305 mmt, rose
17% qoq, and the 9M20 volume was up 5% yoy.

 

The 3Q20 output of semi-finished products at Metinvest
added 11% qoq to 980 kt as its merchant pig iron output retreated 13% qoq to
345 kt while its merchant slab output surged 31% qoq to 635 kt.

 

The holding’s finished product output added 15% qoq in
3Q20 to 1.488 mmt due to a 56% qoq surge in long product output to 242 kt and a
7% qoq increase in hot-rolled plate production to 633 kt.

 

For 9M20, Metinvest’s output of semi-finished products
improved 11% yoy to 2.497 mmt and its finished product output slid 2% yoy to
4.35 mmt.

 

Total coke production slid 3% qoq to 1.211 mmt in
3Q20, while merchant coke output inched up 2% qoq to 544 kt. For 9M20, total
coke production slid 1% yoy to 3.583 mmt, while merchant coke output jumped 31%
yoy to 1.508 mmt.

 

Total 3Q20 iron ore concentrate production inched up
1% qoq to 7.643 mmt, whereas output of merchant iron ore products lost 11% qoq
to 4.554 mmt due to a 17% qoq drop in merchant iron ore concentrate production
to 3.413 mmt that was partially offset by a 13% qoq increase in merchant pellet
production to 1.141 mmt.

 

Total 9M20 iron ore concentrate production rose 5% yoy
to 22.817 mmt, whereas output of merchant iron ore products grew 12% yoy to
14.382 mmt.

 

Dmytro Khoroshun: Metinvest
boosted its output of steel products in 3Q20 in response to the increase in Ukraine export prices in May-September.
As a result, its internal consumption of iron ore products increased. This led
to a drop in merchant iron ore product volumes, even as the total iron ore
product output remained little-changed qoq.

 

Because of 45-day oxygen converter repairs at
Azovstal during September-October, Metinvest might lose about
100 kt of crude steel output in October, or about 5% of the quarter’s total
volume. However, Ukraine export steel prices remained strong in
October, and we expect Metinvest to make the most of this
favorable period by maintaining high steel production rates in
November-December.

 

Because of the strong iron ore prices at the global
market, we also expect Metinvest to maintain its total iron ore output in 4Q20
close to the high levels of 3Q20.

 

We maintain our neutral view on METINV bonds.