Ukraine coke output halves yoy in August

Ukraine coke output halves yoy in August



9 вересня 2014 года
Конкорд Капитал

Metallurgical coke output by Ukraine’s producers plunged 11% yoy to 10.5 mmt in 8M14, an industry association reported on Sept. 8. In August alone, coke production was 0.7 mmt, which is a 43% decline m/m and 51% decline yoy. The sector’s disappointing operating result was the result of warfare that interfered with the production at coke plants located in the Donetsk region, including Avdiyivka Coke (AVDK UK, 4x m/m less), Yasynivka Coke (YASK UK, 2x m/m lower), Alchevsk Coke (ALKZ UK, 11x m/m less). As a result of the disrupted operations, the plants lacked access to coking coal, endured damage to railways and faced reduced coke consumption by local steel mills due to the ongoing war.



Meanwhile, the key production facilities of some coke plants – their coke batteries – have lost power line support. Since their cooling down will demand large CapEx for their restart (or replacement), plant engineers are trying to maintain the batteries in stand-by mode by burning natural gas or even wood.



Roman Topolyuk: The daunting expense of completely reconstructing coke batteries – which could have been the result of coke production facilities being halted – seems to have been eluded. Yet from an operating point of view, such low coke output volumes will constrain Ukraine’s steel production in the coming months.



As of the start of September, according to Metal Courier estimates, only 40% of Ukraine’s coke capacities remained operating, producing up to 0.5 mmt monthly, while current demand stands at 0.7 mmt of coke per month. Steelmakers are planning to cover the gap through imports, having contracted coke shipments from Russia, Poland and China. Falling coke output is negative for coking coal miners, including Coal Energy (CLE PW).

Источник: Конкорд Капитал

Аналитик: Роман Тополюк
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