Metinvest coke asset damaged again, Yenakiyeve Steel still idle

Metinvest coke asset damaged again, Yenakiyeve Steel still idle



18 серпня 2014 года
Конкорд Капитал

Авдеевский коксохимический завод (AVDK)


Power supply was halted on Aug. 17 for Avdiyivka Coke (AVDK UK), the core supplier of coke for Metinvest’s (METINV) steel mills, the holding’s press service reported. The plant has 24 hours to get power supply restored, otherwise its main production assets, coke batteries, will suffer from irrevocable damage. The representatives of Metinvest and related energy holding DTEK are trying to reach an agreement with the combatants in the vicinity of the Avdiyivka plant to secure access to damaged power lines that feed the plant. The town of Avdiyivka, which is located 3 km away from the city of Donetsk, was reported to be freed from terrorists for the first time on July 29, though battles for the town are still ongoing.



Roman Topolyuk: Avdiyivka Coke is the most important provider of coke for Metinvest group (67% in 2013), so its damage will have very clearly negative consequences for Metinvest’s production cycle. After the power supply was cut for the first time in end-July, Metinvest secured coke deliveries from Yasynivskiy Coke, which may continue to cover Metinvest’s demand in coke for as long as Avdiyivka stays idle.



Thus far, three other Metinvest assets are under serious risk of damage due to their location in the war zone: Yenakiyeve Steel (ENMZ UK) (23% of Metinvest’s steel output in 2013) which stopped its production on Aug. 13; Khartsyzk Pipe (HRTR UK), the only pipe producer of the holding; and Krasnodonvuhillia which satisfies 45% of the holding’s coking coal demand. The total contribution of the four risky assets to Metinvest EBITDA was 10% in 2013, we estimate.

Источник: Конкорд Капитал

Аналитик: Роман Тополюк
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