Metinvest steel production plunges 61% yoy in September

Обзоры по компаниям и отраслям 03.10.2014 The steelmaking enterprises of Metinvest (METINV) operated at historically low capacity load in September, the company reported on Oct. 2. Steel output fell 7% m/m and 55% yoy to 190 kt at Ilyich Steel. At Azovstal, steel production rose 3% m/m but plunged 42% yoy to 219 kt. Yenakiyeve Steel stood idle in September, having produced just 46 kt in August. Altogether, Metinvest manufactured only 409 kt of steel in September, which is 12% lower m/m and 61% yoy, according to our estimates. In 9M14, Metinvest steel production fell 21% yoy to 7.5 mmt. Roman Topolyuk: The adverse operating performance of the holding’s steelmaking division in August-September will have a negative impact on Metinvest’s 3Q14 total EBITDA (which may plunge 77% qoq to around USD 230 mln by our projections), since the company’s key business segment, iron ore mining, normally would have sold half of its products to captive steel mills. The redirection of iron ore, not consumed in-house, for sales abroad will have led to lower profitability, by our estimates. The full restoration of steel production volumes by Metinvest and other steelmakers in Donbas is only possible when real peace (not just de jure) is achieved in the region, enabling the recovery of damaged transport and other infrastructure.