Metals and Mining

Anti dumping duties on import of pipes from Ukraine into Russia imposed in 2006 expired January 31 2011 and were not extended. This enables Ukrainian pipe rolling companies to supply pipes to Russian customers at lower cost, thereby improving the competitiveness of Ukrainian pipes on the Russian market, which is the world’s largest pipe market. Meanwhile, Ukrainian pipe rollers have increased output by 59.7% YoY as of January 2011.

The largest Ukrainian mining and metallurgical holding Metinvest announced a share buyout of Mariupol ISW [MMKI UK, U/R], which will take place on the Ukrainian Stock Exchange from 7 February to 18 February 2011. The announced redemption price is 0.8756 UAH per share.

In 2010, Ukrainian pipe rolling companies increased production of ferrous metal pipes by 10.7% YoY to 1.75mln tons. Most pipe producers showed significant output growth rates; however, overall dynamics were affected by a production slowdown by Khartsyzsk Pipe [HRTR UK] in 1H2010.

Russia and Ukraine have reached an agreement on volume of quotas for pipe import from Ukraine into Russia. The volume of quota has reached 300 thsd tons.

During January-November 2011 Ukrainian pipe rolling companies have increased production of steel pipes by 6.2% YoY to 1.57mln mt. Nyzhnyodniprovsk Pipe [NITR UK] increased production by 46%, Novomoskovsk Pipe [NVTR UK] – by 15.3%, Dnipropetrovsk Pipe [DTRZ UK] – by 49.5%, Khartsyzk Pipe [HRTR UK] decreased production by 49.8% YoY.

Interpipe Limited (Cyprus), owner of Novomoskovsk Pipe [NVTR UK] and Nyzhnyodniprovsk Pipe [NITR UK] has restructured debt to creditor banks. The new interest rate is LIBOR+6 p.p. and will be corrected in case of drammatic changes in the company debt/LTM EBITDA ratio. Viktor Pinchuk, the company owner, has taken obligation to invest USD 60 mln into the company equity. Several banks have prolonged credit period till 2018 yet settlement is expected to be shorter, correcting time after each tranche.

During 10M2010 Ukrainian pipe rolling companies have increased the output of steel pipes by 3% YoY to 1.4 mln tons.

According to Interfax, Ukraine’s iron ore exports in 9M10 grew by 24% YoY to 24.7 million tonnes.

According to Metal Courier, Alchevsk ISW [ALMK UK] plans to boost steel output in October by 42%, to 320 thsd tons.

Ukraine’s producers maintained coke output in September (+1.6% MoM), while for 9M10 they managed to increase production by 7.2% YoY. This information was published by the Ukrcoke Association.