Metinvest subsidiary Pokrovske Coal might boost volumes in 4Q21

Pokrovske Coal, Ukraine’s largest coking coal miner
and a subsidiary of Metinvest (METINV), plans to launch a new longwall in
November, according to Orbita, a local TV station, which cited the miner’s CEO,
Valeriy Yakovenko.

 

Pokrovske Coal had already mined 5 mmt of raw coal year-to-date,
Yakovenko said in his Oct. 29 interview to Orbita. In 9M21, Pokrovske Coal mined 4.58 mmt of raw coal.

 

Earlier this year, Pokrovske Coal intended to launch
four new longwalls, three in July and one in August, with total reserves of 5.3
mmt of raw coal, according to a June 25 report by GMK Center, an industry
consultancy.

 

Recall, the daily raw coal production rate at
Pokrovske Coal rose 6% in September following a 19.5% m/m drop in August and a 22.1% m/m fall in July.

 

In 2020, Pokrovske Coal’s output was 6.13 mmt of raw
coking coal (16.8 kt per day), a 22.6% yoy rise. In 2019, Pokrovske Coal
produced 5.0 mmt of coal (13.7 kt per day), a 25.8% yoy jump.

 

Dmytro Khoroshun: Pokrovske
Coal’s mining volumes might rise to 14.5-15 kt per day in October, or 15-20%
more m/m, and possibly further in November-December.

 

To maintain its iron and steel production volumes,
Metinvest needs to boost coal extraction at Pokrovske Coal to at least the
average 2020 level (16.8 kt per day).

 

We maintain our estimate for Pokrovske Coal’s 2021
output at 5.8-6.1 mmt (15.8-16.8 kt per day), or a decrease of up to 6% yoy.

 

We maintain our neutral view on METINV bonds.