OREANDA-NEWS. June 02, 2010. On the background of the global decrease in demand for steel products, the Ukrainian steel makers have decreased their steel output in May by 4.4% m/m to 2.84mn tones and that of rolled metal by 4.5% m/m to 2.67mn tones. The biggest decrease was to be seen at Mariupol Illich Steelworks <MMKI UK U/R> (-19%), Alchevsk Steelworks <ALMK UK U/R> (-18%), and Dniprovskyi Steelworks <DMKD UK U/R> (-18%). At the same time, the vertically integrated companies have managed to even increase their output; in particular, Azovstal <AZST UK BUY> output rose by 7% over this period.

Millennium Capital: steel products demand decrease entailed a sales price decrease what with the raw materials price increase led to losing of the profitability and output decrease. As Millennium Capital has noted earlier, the vertically integrated companies are in a better position because of greater room for price maneuvering, as was the case with the Metinvest companies. A recovery in demand is not expected before August because of the fact that massive reserves had been created by the traders in the previous months.