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in 2019, or 7.1% less y/y. It produced net 28.4 TWh of electricity, or 12.4% less y/y.
9.2.11 ​Metallurgy & mining corporate news
● Metinvest
Metinvest​, Ukraine’s largest steelmaker, plans production cuts due to the pandemic. It will keep its Italian rerolling plants, Ferriera Valsider and Trametal, shut until April 3 to counteract the spreading of the coronavirus​, according to Metinvest’s March 31 press release. The holding does not rule out that the Italian government will extend restrictions on the functioning of these metallurgical plants, the press release said. However, the slab inventories at these plants will allow for a prompt resumption of operations once the quarantine restrictions are lifted, provided there is demand for the plants’ products, according to the press release. Furthermore, if the restrictions on Metinvest’s Italian plants are extended, the holding expects also a decrease in production volumes at its Ukrainian plants, first of all at Azovstal, where the production of merchant slabs might be completely suspended, Metinvest’s press release said. Metinvest is also considering shutting down Azovstal’s blast furnace (BF) No. 3 and delaying the launches (after maintenance) of BF No. 4 at Azovstal and BF No. 4 at Ilyich Steel to May (from April), according to the press release. Metinvest’s joint venture Zaporizhstal also does not exclude a delay in launching its BF No. 5 after maintenance, Metinvest said in its release, adding that it will make the final decisions on launching the blast furnaces depending on its order book in April and on the global situation. The possible reductions in hot iron production in Ukraine will result in Metinvest redirecting its iron ore products to its other traditional markets, in particular to China, according to the press release. Importantly, Metinvest’s mining segment will also suffer because of the holding’s drops in hot iron and steel production in Ukraine. This is because Metinvest will earn $25-30 less per each ton of iron ore products redirected from Ukraine to the distant market of China due to the costly logistics. We also think that demand for iron ore at closer export markets such as Europe will also be depressed because of the coronavirus hurting their economies. Metinvest might face challenges with servicing its debt already in 2020. For this year, Metinvest’s payments amount to about $205mn in interest and $155mn in principal repayments. The latter figure excludes about $400mn in trade finance loans, which Metinvest plans to roll over. However, under adverse export market conditions, Metinvest might need to repay a substantial part of its trade finance loans in a short period of time (up to three months), which might prove a cash flow shock. We maintain our negative view on METINV bonds.
Metinvest steel product prices drop further in early April​. Ukraine FOB prices for the types of steel products exported by Metinvest (METINV), Ukraine’s largest producer, dropped further in early April according to early assessment data for April 3 provided by Metal Expert, an industry consultancy. Slab prices dropped 4% w/w to $328/t on April 3, falling 2% below their recent low of $335/t on November 1. Billet prices dropped 2% w/w to $333/t on April 3, which is 5% below their recent low of $350/t on October 4. HRC prices plunged 9% w/w to $383/t on April 3, remaining 5% above their recent low of $365/t on October 25. The prices provided by Metal Expert are sophisticated estimates but they are not necessarily the same as the prices realized by Metinvest for its specific products.
59​ UKRAINE Country Report​ April 2018 ​ ​www.intellinews.com