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Metals and Mining
February 16, 2010Ukraine’s coke - back on track

Ukraine’s coke sector appears to be ahead of the whole domestic metallurgy sector. Increased coke consumption per tonne of pig iron, which should remain at the same level for at least one year, and further steel sector recovery should boost coke output by 5.4% in 2010. At the same time, driven by the global coke shortage and increased raw materials’ prices, the average domestic coke price in 2010 should increase by 25-30%. These factors should help Ukraine’s coke makers to boost FY2010 net revenues, making the coke sector a most attractive investment target.

Metals and Mining
December 30, 2009Steel sector update

Driven by both internal and external factors, Ukraine’s steel sector is showing clear signs of recovery. Monthly growth in steel output and capacity utilization, underpinned by positive changes in world steel demand and national currency devaluation, impart domestic steelmakers with the chance to end the year on an upbeat note. In the successful 3Q-4Q09, Ukrainian steelmakers emerged from the red, thereby substantially improving their end-of-year financial results. We expect that, in 2010, Ukraine’s steelmakers will continue doing well financially on the back of the further recovery of world steel demand, which should push Ukraine’s average steel export prices up by 10-20% and boost its overall steel output by 7% YoY.

Metals and Mining
June 16, 2009NFER, a Ukrainian commodities hedge fund?

May go bust. Creditors will not mind. Minority shareholders should SELL.

Metals and Mining
April 29, 2009OJSC Enakievo ISW sells stake in Metalen

In 1Q09, OJSC Enakievo ISW sold its 37.04% stake in JV Metalen LLC to Metinvest Holding LLC. The price is unknown; our estimate is USD 55-65 mln. Our interpretation: Metinvest Holding provided OJSC Enakievo ISW with liquidity, to be used in particular for the construction of Blast Furnace No. 3. Metinvest benefited from that deal by effectively increasing its share in the Enakievo ISW group, because OJSC Enakievo ISW will now have to issue 9.07 mln new shares in order to acquire all rights in Metalen (previously, we expected the issuance of 5.71 mln new shares). We also do not rule out additional share issuances aimed at financing BF No. 3’s construction.

Metals and Mining
November 13, 2008Metinvest pawning Khartsyzk Pipes’ shares?

On November 12, 2008, 272.57 mln of shares of Khartsyzk Pipes & Tubes (10.49%) changed hands. Most remarkably, the deal went through the PFTS exchange, the price being UAH 2.12 (USD 0.367) per share, for the deal’s total of USD 100.15 mln. We argue that the deal was not technical, and instead likely indicates that Metinvest needs cash, likely for an acquisition. The shares may now serve as the collateral. Should more HRTR deals go through, it may indicate a complete and permanent sellout, but only with additional support for such a possibility.

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Daily monitor

Metals and Mining
March 11, 2010Ukraine’s iron ore exports grew by 73% in 2M10

In 2M2010, iron ore exports from Ukraine increased by 73% YoY to reach 5 mln tonnes.

Metals and Mining
March 9, 2010Vale iron ore price to grow 80%:POSITIVE for Ukraine GOKs

The Brazilian iron ore giant Vale may increase its domestic price for iron ore by 80%. This increase may consist of two stages: a 40% hike in March and another 40% in April to soften the impace of the input price for Brazilian steelmakers.

Metals and Mining
March 5, 2010Pivnichnyi GOK boosts pellets output in 2M2010 by 33% YoY

In 2M2010, Pivnichnyi GOK managed to boost its pellets output by 33% YoY to reach 1,7 mln tonnes, while its output of sinter feed grew by 20.4% to 2.3 mln tonnes.

Metals and Mining
March 4, 2010Metinvest increases coke price in March by 10%: POSITIVE

According to Metal-Courier, at the beginning of March, Ukraine’s largest coke producer Metinvest increased its coke price by 10% to UAH 2280 (USD 285) per tonne, excluding VAT.

Metals and Mining
March 1, 2010Ukraine’s coke price to grow by another 10% in March

According to Metal-courier, Ukraine’s price for coke in March should rise another 10% MoM. The main reason for this is the raw materials deficiency, due to scheduled repairs for 40-50% of the production capacities some of the country’s key coal making companies; namely, the Chervonolymanska Mine and Zasadko Mine.

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