Daily monitor

Ferrexpo [FXPO LN], Ukraine’s second-largest iron ore producer—and which controls Poltava GOK [PGOK UZ]—decreased pellet output by 8.7% MoM in August to 787,000 tonnes (+15.5% in 8M10). These results were published by the Company.

Domestic producers showed increased coke output in August by 7.4% MoM to 1.5 mln tonnes (+7.4% in 8M10), Ukrcoke reported.

Total governmental debt increased by 6.3% m/m, to USD 45.9 bln, in July 2010. Direct governmental debt increased by 5% m/m, to USD 34.9 bln, and government-guaranteed debt grew by 10% m/m to reach USD 12 bln.

The Ukrainian Cabinet of Ministers has developed a project that proposes a sale in the market of 25% of the government share of financial institutions that experienced government recapitalization. During the month, the plan is expected to be approved or rejected.

The State Property Fund of Ukraine presented Bryansk Machine Building Plant (a member of Transmashholding, Russia) with an offer to terminate their contract on acquisition of 76% share in Luganskteplovoz [LTPL UZ] by agreement between the parties. Bryansk Machine Building Plant was supposed to pay 100% of the share price by August 31 2010, which did not happen. Now the company will have 20 days to terminate the contract or to pay the full contract price, including the competition pledge and fines, at an overall cost of USD 15.7mln.

In July 2010, export of steel pipes from Ukraine decreased by 12.1% MoM to 95thsd. Ton. Revenues from exports fell by 16.5% to USD 100.4 mln. Import of steel pipes has decreased by 18.8% to 3.5 thsd. Ton, while expenses on imports increased by 16.7% to USD 7.6mln. In January-July 2010, export of steel pipes fell by 16.9% to 652 thsd ton, while overall earnings from export accounted 657 mln. During this period, import of steel pipes increased by 31.4% to 29.9thsd Ton, with a total cost of USD 54.3 mln.

According to information disclosed by the CEO of Komsomolets Donbassa [SHKD UK], the company targets the increase in output to 5 mln tons of coal by 2014. This target should be achieved thanks to installation of new equipment based on progressive technologies and investments into human resources.

Ukraine’s steelmakers increased steel output in August by 6% MoM to 2.6 mln tons, Metall-Courier reported. The highest growth among domestic peers was posted by IUD subsidiaries Alchevsk ISW [ALMK UK], at 56% MoM (-20% in 8M10); by Dzerzhinka [DMKD UK], at 43% MoM (-24% in 8M10); and by Petrovskyi ISW [DMZP UK], at 57% MoM (-7% in 8M10). Other steelmakers, whose shares are actively trading on UX, namely Mariupol Illich ISW, Azovstal, and Yenakievo ISW, posted a monthly increase in output at 14%, 2%, and -3%, respectively.

According to the Energy Company of Ukraine, a holding company managing four Ukrainian GenCos – Dniproenergo [DNEN UK], Donbasenergo [DOEN UK], Centrenergo [CEEN UK], and Zakhidenergo [ZAEN UK] – domestic GenCos’s total electricity production rose by 9.3% YoY in 8M2010, to 31.8 bln kW. In monthly terms the output increased by 17.9% during August.

Ukrainian agricultural companies finished their early grain harvest campaign with 29.5 mln tonnes of grain, leguminous, and oil-seed crops, with an average yield of 2.47 tonnes per ha. Agricultural companies processed only 11.9 mln ha of sowing areas.