Daily monitor

From January-August 2010, Luganskteplovoz [LTPL UZ] produced 36 locomotive sections, 6 of which were produced in August. Locomotives produced last month were ordered by clients operating on Russian railways. Meanwhile, Ukrzaliznytsya (Ukrainian Railways) announced plans to purchase 16 locomotive sections in 2010 and 20 more in 2011.

On Friday the Kiev Administration secured a USD 190 mln (UAH 1.5 bln) loan from state banks Ukreximbank and Oshchadbank to compensate Kievenergo [KIEN UK] for the difference between heating tariffs and input costs.

The NBU expects consumer inflation to be 10.5% in 2010 and 11.2% in 2011 if current monetary policies remain unchanged and all IFM criteria are satisfied.

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.