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quarter of 2018, 6.813mmt, rose 4% q/q, whereas output of merchant iron ore products slid 2% q/q to 3.794mmt due to a 14% q/q decrease in merchant pellet production to 1.730mmt, which was largely offset by a 10% q/q increase in merchant iron ore concentrate production to 2.064mmt. For 2018, total iron ore concentrate output was flat y/y at 27.353mmt, while production of merchant iron ore products inched up 1% y/y to 15.218mmt due to a 30% y/y jump in merchant pellet output to 7.484mmt, which was offset in large part by a 17% y/y drop in merchant concentrate production to 7.734mmt.
To retain skilled workers tempted to move to the EU, the Metinvest group raised salaries by 40-45% to the monthly hryvnia equivalent of $1,000-1,200, Alexander Pimkin, the steelmaker’s personnel director, tells the Ministry of Industry. He lists the social benefits packages tailored to workers, the company’s investments in parks and festivals, and concludes: “All this is intended to keep employees in their cities, fill their lives with interesting meaning and receive decent remuneration for their work.”
S&P raises M etinvest outlook to Positive . The outlook on the long-term credit rating of Ukraine's largest steelmaker Metinvest (METINV) was upgraded by S&P to Positive from Stable on Jan. 29. The agency also affirmed its rating at B- (same as Ukraine’s sovereign), adding that the Positive outlook indicates the possibility of an upgrade to B within six to twelve months. S&P said that in 2019-2020, “Metinvest is likely to resume paying dividends, which will provide some clarity regarding its future financial policy.” Metinvest’s approach to dividend payments would be one of the factors on which the possible rating upgrade would depend upon, S&P said. The ratings agency briefly mentioned that “until recently, the company had a $460mn shareholder loan, which we viewed as a subordinated instrument.” Metinvest’s two other long-term credit ratings are from Moody’s – a B3/Stable grade that was raised from Caa1 on Dec. 27, 2018 and which is one notch above Ukraine’s sovereign – and from Fitch, which offered a B/Positive assessment, also one notch above Ukraine’s sovereign that was raised from RD on Apr. 6, 2017.
The owner of Ukraine’s metal pellet producer Ferrexpo is suspected of hiding his business interests . Kostyantyn Zhevago, the CEO and majority owner of Ukraine’s largest iron ore pellet exporter Ferrexpo, might face criminal charges for not declaring some of his business interests in his 2015 and 2016 state asset and income declarations, the ukranews.com news site reported on February 11, citing an anonymous law enforcement source. The National Anti-Corruption Bureau of Ukraine (NABU) has submitted a request to prosecutors for parliament to strip Zhevago, an independent MP, of his parliamentary immunity to face the possible charges, the report said. “We think that the probability of Zhevago losing his parliamentary immunity is low in the current parliament. Indeed, it has already rejected requests to strip more controversial MPs of their immunity,” Dmytro Khoroshun of Concorde Capital said in a note. “Nevertheless, it remains to be seen whether Zhevago keeps his Rada seat in the upcoming October parliamentary elections, and whether charges against him are pressed in case he ceases to be an MP,” Khoroshun added.
Ukraine’s largest iron ore pellet exporter Ferrexpo saw pellet output decline by 11.5% month-on-month to 830 tonnes (which amounts to 26.8 tonnes per day) in January. Dmytro Khoroshun at Kyiv-based brokerage Concorde Capital tentatively expects Ferrexpo’s 2019 production volume to be in line with the company’s guidance of 10.6mn tonnes (about 29.1 tonnes per
75 UKRAINE Country Report March 2019 www.intellinews.com