The Severniy Mining and Processing Works (SGOK) produced 950 kilo tons of pellets in May, up by 8% MoM compared to April. Total YTD production volume declined by 3% to 5.9 MT. The company finished its scheduled repairs at one of its pelletizers and currently operates all four of its pelletizing machines.
Phoenix Capital analysts said, “The reached YTD production volume indicates that SGOK can exceed its announced 2011 production target of 10.3 MT of pellets. That will largely depend on demand from captive customers within Metinvest Group. Even if it slows, the company has the option of upgrading one of its four pelletizers, which can increase its production capacity by 0.2 MT.”
Phoenix Capital analysts said, that “At a price of $147 per ton of pellets in May, which is 12% higher than the Q1 2011 average, the company will report stronger financials in Q2 2011. In Q1 2011 SGOK posted an EBITDA of $287 million, which is 137% higher YoY and 52% up QoQ. Its EBITDA margin reached a heavy 65%”. (Phoenix-Capital)
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