Metals and Mining

Azovstal [AZST UZ, U/R] decreased crude steel output by 49% MoM in November to 209 thsd mt, according to Interfax-Ukraine. This is 50% below the 11M08 average of 481 thsd mt. The overall November crude steel output in Ukraine was 1.6 mln mt, down 14% MoM and 50% below the 11M08 average.

A corporate relations officer of the Interpipe Group, Oleg Kuzmin, spoke to the Delo newspaper on the prospects of the tubes and pipes markets. Kuzmin expected the markets to stabilize only in one and a half – two years. The Group will continue to push with its mini-mill project that will secure the supply of billets for pipes. Because of the current crisis, the Group plans to cut production 57% QoQ in 4Q08. However, because of the accumulated inventories, sales will drop only 22% QoQ in 4Q08.

Shareholders of Poltava GOK [PGOK UZ, U/R] will convene at an EGM on December 30, 2008, and discuss two unexpected questions. The first question of the agenda is changing the structure of the managing bodies of the company. The second question is changing the registrar.

According to an official filing by Khartsyzk Pipes & Tubes [HRTR UZ, N/R], as of November 18, Metinvest B.V. of the Netherlands owns 76.78% of shares outstanding in the company, having just increased its stake by 10.49%. On the other hand, MetalUkr Holding Limited has just decreased its stake by 10.49% and now owns 16.22%.

Daniel Valk, the CEO of Dniprospetsstal [DNSS UZ, U/R], revealed that the company plans to produce 15 thsd mt of rolled products in November. This volume will be 39% down MoM (24.5 thsd mt in October) and 48% below the 10M08 average of 29.0 thsd mt per month.

According to Kommersant-Ukraine, Zaporizhstal [ZPST UZ, U/R] has negotiated a decrease in iron ore concentrate fine from USD 120 to USD 70 per mt. The newspaper cited Aleksandr Vilkul, the Honorary President of both Central and Pivnichnyy GOK, in reporting this development.

According to Interfax-Ukraine, which has reported coke production numbers for October, the total 6% water content gross coke output of Ukrainian coke makers amounted to 1.19 mln mt last month. This is 34% down from the 9M08 average of 1.80 mln mt, and 18% down MoM from September’s 1.46 mln mt.

In October, Avdiivka Coke [AVDK UZ, U/R] decreased output of 6% water content gross coke by 9% MoM to 229 thsd mt, according to Interfax-Ukraine. In comparison with the average 9M08 output, at 373 thsd mt, the October volume was down 39%. For comparison, the overall sector output volume dropped 18% MoM in October.

According to various news sources, the Metinvest Group has submitted a note to Bulgaria’s regulators in which Metinvest disclosed its intention to purchase the United Coal Company of the USA.

According to Interfax-Ukraine, Bagliy Coke [BKOK UZ, U/R] dropped output 34% MoM in October to 33 thsd mt. This is 47% lower than the average 9M08 value of 62 thsd mt. For comparison, the overall sector output volume dropped 18% MoM in October.