Page 73 - UKRRptMay19

investment-related debt facilities and with withdrawals from its $1.9bn in working capital.”
The attributable production of iron ore concentrate at the subsidiaries of Ukraine’s largest steel producer Metinvest rose by 3.9% year-on-year to 8.29mn tonnes in January-March, according to calculations of Kyiv-based brokerage Concorde Capital published on April 15. The output amounted to 2.88mn tonnes (92.9 tonnes per day) in March, according to Concorde Capital’s analysis. This is a 0.7% month-on-month gain on a daily average basis. The holding’s pellet output was 945 tonnes in March, a 5.9% m/m decrease on a daily average basis. Concentrate production at Inhulets Iron Ore gained 0.8% m/m in March to a daily rate of 30.9 tonnes. Production at Northern Iron Ore inched up 0.3% m/m to 33.9 tonnes per day. Production at Central Iron Ore rose 1.6% m/m to 11.9 tonnes per day, whereas output at Southern Iron Ore climbed 0.5% m/m to 35.4 tonnes. Concorde's Dmytro Khoroshun expects Metinvest’s 2019 attributable iron ore concentrate output to at least stay flat y/y, but possibly surge by several million tons, because of the recent Vale mine disaster in Brazil. The recent management guidance for Metinvest’s subsidiaries (excluding Southern Iron Ore) is for a 4-5% y/y increase, or by 1.2mn-1.3mn tonnes.
Nearly $900mn of investments in Metinvest’s two Mariupol steel mills last year helped push Ukraine’s steel production up 4.5% during the first quarter, to 5.5mn tons. Last month, Metinvest launched a new continuous casting machine with annual capacity of 2.5mn tons at its Illyich Steel MMKI mill. Next month, Metinvest’s other big project goes on-stream: a modernized blast furnace at Azovstal will increase the plant’s annual hot metal capacity by up to 1.6mn tons. Dragon Capital writes: “Domestic steel production keeps recovering gradually, driven by a pipeline of CAPEX projects that are likely to continue powering the steel sector through 2020.”
Ukraine’s largest steel producer Metinvest, controlled by oligarch Rinat Akhmetov, is going to squeeze out minority shareholders at its main Ukrainian production asset, Ferrexpo Poltava Mining. As of April 1 Ferrexpo owned 99.12% of Poltava Mining shares, according to news agency Interfax. The price at which Ferrexpo will buy the Poltava Mining shares owned by the minority shareholders remains unknown. In March Poltava Mining stock traded in a wide range from UAH6 ($0.22) to UAH26.5 per share, according to Interfax. Dmytro Khoroshun at Kyiv-based brokerage Concorde Capital believes that the squeeze out will be positive for Ferrexpo because it improves corporate governance by eliminating the bureaucratic burden and legal risks attached to the current quasi-public status of most Ukrainian companies, including Poltava Mining. "Within the squeeze out, Ferrexpo stands to buy 1.7mn of Poltava Mining shares from the minorities. The total cost will be up to $1.7mn, using the prices cited by Interfax-Ukraine, which will be a solid investment for Ferrexpo," he wrote in a note on April 2.
Steel production at Ukraine’s largest steel producer Metinvest increased by 1.2% month-on-month to 22.2 tonnes per day (or 689 tonnes per month) in March, according to calculations of Kyiv-based brokerage Concorde Capital published on April 5. The result includes Azovstal and Ilyich Steel figures. Ilyich Steel reported a 3.5% m/m gain in steel production to 10.9 tonnes per day, while Azovstal’s output slid 1% m/m to 11.4 tonnes per day in March. The holding's hot iron output rose 6.1% m/m to 22.3 tonnes per day. In January- March, Metinvest's steel output was 1.94mn tonnes, or 7.4% more year-on- year. Concorde's Dmytro Khoroshun wrote in a note on April 5 that as a result
73 UKRAINE Country Report May 2019 www.intellinews.com