Metinvest steel output jumps 20% m/m in May
Steel production at Ukraine’s largest producer Metinvest (METINV) was 18.7 kt per day (or 580 kt per month) in May, a 19.7% m/m jump, according to Concorde Capital’s analysis of separate news reports by Interfax-Ukraine.
Ilyich Steel reported a 13.7% m/m gain in steel production to 8.9 kt per day, while Azovstal’s output advanced 25.6% m/m to 9.8 kt per day in May. The holding's hot iron output increased 12.8% m/m to 20.5 kt per day.
In 5M20, Metinvest's steel output was 3.22 mmt (21.2 kt per day), or 5.2% less yoy.
In the first 17 days of June, the daily average of 22.2 freight trains traveled the Komysh-Zorya–Volnovakha railway section heading to Mariupol, according to the website of the Center for Transport Strategies (CFTS), which is 29% more than the daily average for May.
Dmytro Khoroshun: May’s m/m gains in daily iron and steel production rates at Metinvest were better than the 5% increase we estimated from the CFTS freight traffic data for May.
The 12.8% m/m gain in daily hot iron output was possibly due to Metinvest's steelmakers partially depleting their raw material inventories. The 19.7% m/m jump in daily steel production rate was possibly in part due to Metinvest’s steelmakers producing less merchant pig iron and transforming more hot iron into steel.
The CFTS freight traffic data for June 1-17 suggest Metinvest’s iron and steel daily production volumes might rise further m/m in June. However, Metinvest’s steelmakers might use some of the raw materials they receive in June to replenish their inventories.
We maintain our negative view on METINV bonds.