Metinvest's steel production drops 18% QoQ in 4Q15

9 февраля 2016 года

Metinvest announced yesterday that its crude steel production dropped 18% QoQ to 1.7mt in 1Q15 while production of iron ore concentrate stayed flat at 8.2mt. At the same time, the company's output of coking coal concentrate declined 5% QoQ to 0.85mt. The company cited lack of orders for steel products as the key factor behind weak 4Q15 production figures. In YoY terms, Metinvest's 4Q15 production was mostly flat: down 2% in crude steel output, down 3% in iron ore concentrate output and up 2% in coal concentrate output. For the whole 2015, Metinvest's production dropped 17% to 7.7mt of crude steel, iron ore concentrate was down 8% to 32.2mt, and coal concentrate dropped 20% to 3.3mt. This was the result of production shutdowns and constrained supply of energy and raw materials, all caused by the military conflict in Donbass.

Investment implications: The abrupt fall in Metinvest's steel production in 4Q15, was caused by a number of factors, which in our view included, in addition to the lack of demand, technological issues and the company's attempts to prop up steel prices through limited supply. As the situation with exported steel prices started improving in February, we expect the company to overtake the production arrears and recover steel output by 8-12% in 1Q16.

Источник: ICU

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