Metals and Mining

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 Ukrainian News agency, in 1H10, Ukraine increased its iron ore export by 42% to 18.6 mln tonnes.

Mariupol Illich ISW should increase its August pig iron output by 10% MoM to 399 thsd tonnes and than keep it flat in September, Metal Courier reported.

Zaporizhstal [ZPST UK], one of the largest Ukraine’s steelmakers, intends to carry out production test of PCI-unit in September. According to a Company’s representative, installation and construction work was finished and the unit is now ready for further hot tests.

According to Ukrainian News, the Antimonopoly Committee of Ukraine approved a merger between Mariupol Illich ISW [MMKI UK] and the largest vertically integrated metallurgical holding, Metinvest. Following the deal, Metinvest Holding should control a substantial share of the Ukrainian metallurgical market. Given this fact, the Antimonopoly Committee has imposed several restrictions on the company to regulate supplies of HRC, dolomite, and limestone on the internal market as well prices for these types of production.

Mariupol Illich ISW [MMKI UK], third largest steelmaker in Ukraine, is going to shift from importing iron ore pellets from Russian producers to supplies from Pivnichnyi GOK [PGOK UK], Metall Courier reported.

A managing company for Poltava Iron Ore [PGOK UK], British Ferrexpo [FXPO LN] has reported strong financial results for 1H10. Its net revenues increased by 74% YoY to reach USD 526 mln, EBITDA by 257% YoY to USD 215 mln, and income by 383% YoY to USD 139 mln. These outstanding financials resulted from 90–120% growth in the price of pellets compared to last year’s annual benchmark price, and the company’s pellets sales volume grew by 13% YoY, to 4.7 mln tons. At the same time, FXPO’s production costs have increased by only 9% YTD, to USD 37.8.

Domestic producers showed decreased coke output in July, by 1.1% MoM, to 1.392 mln tonnes (+8.5% in 7M10), Ukrcoke reported.

Ukraine’s second largest iron ore producer, Ferrexpo [FXPO LN], contracted its pellet output in July by 0.3% MoM to 850 thsd tonnes (+17.4% in 7M10).