Metinvest steel output rises 11.7% m/m in December

Steel production at Ukraine’s largest producer
Metinvest (METINV) was 18.8 kt per day (or 583 kt per month) in December, an
11.7% m/m gain, according to Concorde Capital’s analysis of separate news
reports by Interfax-Ukraine.

Ilyich Steel reported a 29.0% m/m jump in steel
production to 9.0 kt per day, while Azovstal’s output slid 0.6% m/m to 9.8 kt
per day in December. The holding’s hot iron output rose 9.7% m/m to 21.3 kt per
day.

In 2019, Metinvest’s steel output was 7.58 mmt, or
3.5% more yoy.

Dmytro Khoroshun: If steel prices
in 2020 remain at their end-2019 level or improve, Metinvest’s 2020 steel
output might remain at its 2019 level, around 7.6 mmt. However, if the
situation deteriorates, Metinvest’s steel output might drop by as much as
10-15% to 6.4-6.8 mmt.

We maintain our neutral view on METINV bonds.