SEVERSTAL PAO Severstal (MICEX-RTS: CHMF; LSE: SVST), one of the world's leading vertically integrated steel and steel-related mining companies, today announces its operational results for Q2 2015 and H1 2015.
Q2 2015 GROUP HIGHLIGHTS
● In Q2 hot metal production decreased 1% q/q to 2.29 mln tonnes (Q1 2015: 2.31 mln tonnes). At the same time, crude steel production decreased 4% q/q to 2.85 mln tonnes (Q1 2015: 2.96 mln tonnes). While this suggests lower consumption of scrap material in steelmaking process, it also reflects an impact of scheduled maintenance at the BOF#3 and continuous caster #2 and #4.
● Consolidated sales of steel products increased 4% q/q partially due to seasonal increase in demand, despite anticipated weaker steel consumption domestically. Moreover, Severstal's proximity to export markets allowed the Company the flexibility to allocate additional volumes for export.
● The share of high value-added (HVA) products in the sales portfolio improved 1 ppt to 47% (Q1 2015: 46%) largely due to a 13% q/q increase in downstream products sales and a reduction in long products sales q/q. These have partially offset a 10% q/q increase in hot-rolled coil sales.
● Coking coal concentrate sales increased 15% q/q in spite of a decrease in ROM-coal output volumes in Q2 at Vorkutaugol on the back of scheduled long-walls repositioning activity in June 2015. The former is largely a low-base effect with washing plant operations being negatively impacted by severe weather conditions in Q1.
● Whilst the pricing environment on the global markets remains challenging, Severstal average USD-nominated selling prices for steel products improved q/q owing to RUB appreciation. Specifically, after catching up with the USD-nominated parity, domestic prices reached an unusual premium vs. export prices. We would expect a gradual normalization of this premium later in the year.
SUMMARY OF KEY PRODUCTION, SALES VOLUMES AND SELLING PRICES DATA
Production, tonnes | Q2 2015 | Q1 2015 | Change, % | H1 2015 | H1 2014 | Change, % |
Crude steel (Russian Steel) | 2,847,753 | 2,959,389 | (4%) | 5,807,142 | 5,548,036 | 5% |
Hot metal (Russian Steel) | 2,289,358 | 2,305,312 | (1%) | 4,594,670 | 4,472,728 | 3% |
Sales volumes, tonnes | Q2 2015 | Q1 2015 | Change, % | H1 2015 | H1 2014 | Change, % |
Coking coal concentrate | 1,458,915 | 1,272,642 | 15% | 2,731,557 | 2,611,921 | 5% |
Iron ore pellets | 2,600,490 | 2,576,453 | 1% | 5,176,943 | 5,122,128 | 1% |
Iron ore concentrate | 1,072,732 | 984,272 | 9% | 2,057,004 | 2,310,441 | (11%) |
Total steel products (Consolidated) | 2,658,122 | 2,544,868 | 4% | 5,202,990 | 5,103,883 | 2% |
Total steel products (Russian Steel) | 2,671,598 | 2,558,524 | 4% | 5,230,122 | 5,193,032 | 1% |
Average price, $/tonne | Q2 2015 | Q1 2015 | Change, % | H1 2015 | H1 2014 | Change, % |
Coking coal concentrate, Vorkutaugol | 91 | 64 | 42% | 78 | 95 | (18%) |
Iron ore pellets, Karelsky Okatysh | 52 | 53 | (2%) | 52 | 98 | (47%) |
Iron ore concentrate, Olkon | 35 | 32 | 9% | 34 | 66 | (48%) |
Hot-rolled coil (RSD) | 405 | 394 | 3% | 400 | 485 | (18%) |
High value added steel products, % | Q2 2015 | Q1 2015 | Change, % | H1 2015 | H1 2014 | Change, % |
Severstal (Consolidated) | 47% | 46% | 1 ppts | 47% | 48% | (1 ppts) |
Severstal Russian Steel | 47% | 46% | 1 ppts | 46% | 47% | (1 ppts) |
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