Page 54 - UKRRptApr19

year-on-year. According to Concorde's Dmytro Khoroshun, Ilyich Steel’s steel output remains strong after the recent upgrade of one of its casting machines, despite a 14-day repair of the plant’s blast furnace #3 in February. At the same time, steel output at Azovstal rebounded strongly because the plant completed on January 31 a 17-day repair at its blast furnace #2. "If during the rest of 2019 Ilyich Steel maintains its daily steel production rate at around 10.5-11 tonnes per day, and if it is combined with Azovstal’s 2018 daily average of 11.7 tonnes per day, the resulting Metinvest total output would be 22.3 tonnes per day, or about 8.1mn tonnes per year, up from 7.32mn tonnes in 2018," he added. However, Khoroshun is sceptical that such a high output can be achieved this year, so currently he expects Metinvest's 2019 steel output at about 7.3mn-7.7mn tonnes, or up to 5% more y/y.
● Interpipe
Pipe production at Ukraine's largest steel pipe producer Interpipe increased by 2.1% year-on-year to 121.6 tonnes in January-February, according to calculations of Kyiv-based brokerage Concorde Capital published on March 14. The company's pipe production was 2 tonnes per day (or 56.1 tonnes per month) in February, a 6.2% month-on-month decrease. Interpipe NTRP pipe production slid 16.3% m/m to 0.63 tonne per day in February. Interpipe NMPP output jumped 33.6% m/m to 0.38 tonne per day. Interpipe Niko Tube output lost 9.4% m/m to 1 tonne per day. Concorde's Dmytro Khoroshun tentatively expects the 2019 pipe production volume at Interpipe to drop 7% y/y to 700 tonnes, or 1.92 tonnes per day.
● Other
Canadian iron ore exploration and development company Black Iron has been offered rights to "an ideal" parcel of land that it needs in order to develop the Shymanivske mine project in Ukraine, the company said in a statement on March 14. The land parcel will host the processing plant, tailings and waste rock, the company said in its press release, adding that it was offered via a plan developed by Ukraine’s Ministry of Defence. To secure rights to this land, Black Iron needs to finalise discussions with the ministry on relocating its facilities currently there, according to the statement. Black Iron is going to start plant construction by the end of 2019. The company said that at today’s iron ore prices, the after-tax rate of return for this project is almost 70%, because its product - the 68% Fe pellet feed material - will command prices significantly higher than the benchmark 62% Fe index.
9.2.11 Other sector corporate news
“Chinese investors” plan to work with Ukraine’s government in a $100mn plan to develop Motor Sich air engine factory and its design affiliate, Ivchenko-Progress, both in Zaporizhia, Delo.ua reports, citing Yuriy Brovchenko, deputy minister of Economic Development and Trade. Last September, citing national security concerns, the State Security Service, or SBU, blocked a $100mn bid by Beijing’s Skyrizon Aviation to take a controlling state in Motor Sich. In a move opposed by the US and Japan, China wants to learn how to make Motor Sich turbo fan engines for its own military helicopter, cargo and trainer aircraft. Anatoly Malysh, head of the Motor Sich Supervisory Board, later told Interfax-Ukraine that he does not know of any state investment plans.
54 UKRAINE Country Report April 2019 www.intellinews.com