Khartsyzsk Pipe Plant’s 1H08 pipe output decreased by 60% y-o-y to 130 kt, Interfax has reported. In addition, the pipe maker’s June production dropped by 50% m-o-m after it had increased by 25% in May.
The ragged production profile suggests that HRTR does not have stable demand and works on spot deliveries. We had expected this type of uneven output pattern, and we maintain our SELL recommendation with a target price of $0.36 per share. (See our latest report titled “Ukraine’s Pipes: Fuelled by Industrial Growth” from May 2008).

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