Metinvest steel output slides 3% qoq in 4Q20

Ukraine’s largest steelmaker Metinvest (METINV)
reported on Jan. 29 a 3% qoq drop in steel production at its subsidiaries to
2.118 mmt in 4Q20. Azovstal’s output lost 6% qoq to 1.038 mmt in 4Q20, while
Ilyich Steel’s output slid 1% qoq in 4Q20 to 1.080 mmt, according to the
holding’s quarterly operational update. Year-on-year, Metinvest’s 2020 crude
steel output added 9% to 8.27 mmt due to a 14% yoy gain at Ilyich Steel and a
4% advance at Azovstal.

 

The holding’s hot iron output in 4Q20, 2.105 mmt,
dropped 9% qoq, and the 2020 volume was up 7% yoy to 8.475 mmt.

 

The 4Q20 output of semi-finished products at Metinvest
lost 17% qoq to 816 kt as its merchant pig iron output plunged 31% qoq to 238
kt while its merchant slab output dropped 9% qoq to 578 kt.

 

The holding’s finished product output was flat qoq in
4Q20 at 1.482 mmt as a 31% qoq plunge in long product output to 167 kt and a 7%
qoq decrease in hot-rolled plate production to 590 kt were fully offset by a
24% qoq jump in hot-rolled coil production to 479 kt and a 55% qoq surge in
cold-rolled coil output to 62 kt.

 

For 2020, Metinvest’s output of semi-finished products
improved 5% yoy to 3.313 mmt and its finished product output rose 4% yoy to
5.833 mmt.

 

Total coke production inched up 1% qoq to 1.224 mmt in
4Q20, while merchant coke output was flat qoq at 543 kt. For 2020, total coke
production rose 3% yoy to 4.808 mmt, while merchant coke output jumped 28% yoy
to 2.051 mmt.

 

Total 4Q20 iron ore concentrate production inched up
1% qoq to 7.684 mmt, whereas output of merchant iron ore products rose 3% qoq
to 4.694 mmt due to a 9% qoq increase in merchant pellet production to 1.239
mmt and a 1% qoq rise in merchant iron ore concentrate production to 3.455 mmt.

 

Total 2020 iron ore concentrate production rose 5% yoy
to 30.501 mmt, whereas output of merchant iron ore products grew 8% yoy to
19.075 mmt.

 

Production of coking coal concentrate at Metinvest was
633 kt in 4Q20 (-11% qoq) and 2.883 mmt in 2020 (-3% yoy).

 

Dmytro Khoroshun: Metinvest’s
3% qoq drop in 4Q20 steel output due to repairs at Azovstal was smaller than the 5% we initially expected.
Metinvest’s iron ore output in 4Q20 remained stable qoq at high levels, as expected.

 

We expect the holding in 1Q21 to continue producing
both steel and iron ore at the 4Q20 level to make the most of the period of
high prices at the global markets.

 

We maintain our neutral view on METINV bonds.