Railway product prices drop 10% m/m in February for Ukraine exports
Ukraine export prices for railway products sold mostly by Ukraine’s largest producer Interpipe (INTHOL) was USD 1,841/t in February, 10% lower m/m but still 13% higher yoy, according to our analysis of UkrStat data released on Apr. 21.
Recall, in January this price fell 4% m/m to USD 2,046/t after rising for more than a year.
The railway product UkrStat group – for which Concorde Capital calculated its price – consists 80-100% of Interpipe railway products, mostly wheels. For example, in 2019 Ukraine exported 187 kt of such railway products, while Interpipe exported 158 kt (84% of Ukraine’s total). Therefore, up to 20% of this group consists of products other than Interpipe’s, such as axles by other producers. Nevertheless, the average prices for this product group of Ukraine’s exports should capture some of the dynamics of prices for Interpipe products.
Dmytro Khoroshun: The railway product price drops in January and February suggest the EBITDA of Interpipe’s railway product segment will drop from USD 68 mln in 4Q19.
Starting from March-April, railway product prices will likely experience a further slowdown due to the coronavirus pandemic.