Metinvest restarts Yenakievo Steel, ramps up mills in Mariupol

Обзоры по компаниям и отраслям 25.03.2015 Ukraine’s largest steel maker and iron ore miner Metinvest (METINV) has relaunched its hot iron and steel production at Yenakievo Steel. This is Mwtinvest’s third largest steel mill, which is located on the occupied territory and has been idle since beginning of February; the holding reported on Mar.24. The restart has become possible after railway lines in the region have been repaired. Rolling mills at Yenakievo and related Makeevo plants will be relaunched in April. Yenakievo Steel will produce up to 200 kt of steel in April, which corresponds to 80% of its capacity load. In a separate statement, Metinvest announced that it plans to increase the capacity load of its two other steelmakers, located in Mariupol – Azovstal and Ilyich Steel. In April, both enterprises will produce around 530 kt of steel a level, which hasn’t been reached since active military action erupted in Donbas in August 2014. Zaporizhstal, a steelmaker, which is 50% owned by Metinvest is operating close to 100% capacity load. Roman Topolyuk: The news is very positive for Metinvest, which has struggled to renew its steelmaking capacities, due to destroyed railway lines and the damage to its enterprises in the Donbas region,. Full production for steelmakers is especially important after iron ore prices have more than halved since beginning 2014, The company’s margins on selling iron ore to third parties has been squeezed, while the profitability of its own processing of iron ore into steel products has improved significantly. However, Metinvest needs to increase steel production at its mills closer to full capacity in 2015 in order to make up for the poor steel production of last year. Production in 2014 came in at 9.2 mmt, which was a 26% yoy decline, compared to 2013. Complete restoration of peace in the region is a necessary pre-requisite for that. Otherwise, we see Metinvest producing around 8.5 mmt of steel in 2015 (-7% yoy).