Metinvest Azovstal to delay restart of oxygen converter due to accident

16 July 2019

The Azovstal plant of Ukraine’s largest steelmaker Metinvest (METINV) would delay the restart of its oxygen converter No. 1, which was shut down in June, to August or beyond, according to a July 15 report by Metal Expert, an industry consultancy. Previously, Azovstal planned to restart this converter in July, according to Metal Expert, but the July 12 accident with its hot iron mixer No. 1 caused the plant to change its plans.

 

Metal Expert also said that Azovstal might reveal how long it will take to repair its hot iron mixer by the end of July.

 

Dmytro Khoroshun: We downgrade our estimate for Metinvest’s 2019 steel production to 7.3-7.7 mmt (or 0-5% up yoy) because of Azovstal’s mixer accident.

 

Nevertheless, we note that Metinvest might mitigate the financial effects of the accident by increasing sales of iron ore products to third parties.

 

Also, Metinvest might be compensated for the damages to its equipment and the loss of production resulting from the accident if it was properly insured and if its claims are eventually accepted.

 

We maintain our bullish view on METINV bonds.