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 Q1 2018.
Q1 2018 GROUP HIGHLIGHTS
- Hot metal output remained almost unchanged at 2.35 mln tonnes (Q4 2017: 2.34 mln tonnes) compared with the previous quarter, and crude steel production marginally increased 1% to 3.03 mln tonnes (Q4 2017: 3.01 mln tonnes).
- Consolidated steel product sales increased 3% to 2.86 mln tonnes compared with the previous quarter (Q4 2017: 2.78 mln tonnes). Meanwhile, the Company reduced steel product stock levels at its export subsidiaries in Q1 2018. Growth in semi-finished product volumes was driven by a change in the structure of product mix and increased demand for billets.
- The Company increased export sales volumes to 48% (Q4 2017: 42%) due to increased profitability of export deliveries. The share of high value-added (HVA) products within the sales portfolio remained high at 45% (Q4 2017: 47%), declining only 2 ppts due to a seasonal change in product mix.
- Coking coal concentrate sales volumes from Vorkutaugol declined 25% affected by the long-wall repositioning at the Vorgashorskaya mine impacting production of 'GZHO' grade concentrate. Meanwhile the Company managed to keep production of '2ZH' grade coal stable, fully matching the production needs of CherMK.
- Iron ore pellet sales decreased 28% and totalled 2.38 mln tonnes (Q4 2017: 3.30 mln tonnes) after the realisation of a significant share of finished goods in transit in Q4, shifted from the previous quarter, and an increased share of goods in transit in Q1 2018, which will be realised in subsequent periods.
- Iron ore concentrate sales were up 14% q/q to 1.29 mln tonnes (Q4 2017: 1.14 mln tonnes) despite the seasonal slowdown in production at Olkon. Iron ore concentrate sales improvement in Q1 2018 reflects the consolidation of the Yakovlevskiy mine and stock sell-off at Olkon.
- In Q1 2018 steel and raw material demand remained high. Global steel prices were supported by winter restrictions in China and seasonal increased Chinese demand in March, which contributed towards higher prices of raw materials. Additionally, HCC prices were high due to various supply disruptions in Australia and iron ore prices were high as a result of higher steel margins in China and stronger demand for high quality iron ore. Russian export prices, which are currently exceeding Chinese export prices due to steady demand in most consuming regions, are expected to follow global trends in Q2 2018.
- In 2018, Severstal Resources anticipates an increase in production volumes of 40kt of pellets at Karelsky Okatysh and 370kt of coking coal concentrate at Vorkutaugol. Yakovlevskiy mine's iron ore output is estimated to be c.1.3 million tonnes for 2018. Severstal Russian Steel production volumes growth will be positively impacted by a new ladle furnace (+75kt of crude steel) and a new HDG (+400kt) and colour-coating (+200kt) unit.
SUMMARY OF KEY PRODUCTION, SALES VOLUMES
Production, tonnes | Q1 2018 | Q4 2017 | Change, % | Q1 2018 | Q1 2017 | Change, % |
Crude Steel (Russian Steel) | 3,033,094 | 3,012,107 | 1% | 3,033,094 | 2,863,947 | 6% |
Hot metal (Russian Steel) | 2,347,372 | 2,343,386 | 0% | 2,347,372 | 2,341,719 | 0% |
Sales volumes, tonnes | Q1 2018 | Q4 2017 | Change, % | Q1 2018 | Q1 2017 | Change, % |
Coking coal concentrate | 628,463 | 832,559 | (25%) | 628,463 | 710,622 | (12%) |
Iron ore pellets | 2,376,920 | 3,297,251 | (28%) | 2,376,920 | 2,579,417 | (8%) |
Iron ore concentrate | 1,291,529 | 1,136,650 | 14% | 1,291,529 | 802,939 | 61% |
Total steel products (Consolidated) | 2,864,783 | 2,784,373 | 3% | 2,864,783 | 2,530,181 | 13% |
Total steel products (Russian Steel) | 2,874,862 | 2,792,509 | 3% | 2,874,862 | 2,540,351 | 13% |
High value added steel products, % | Q1 2018 | Q4 2017 | Change, % | Q1 2018 | Q1 2017 | Change, % |
Severstal (Consolidated) | 45% | 47% | (2 ppts) | 45% | 44% | 1 ppts |
Severstal Russian Steel | 45% | 47% | (2 ppts) | 45% | 44% | 1 ppts |
SEVERSTAL'S CONSOLIDATED SALES (NET OF INTERCOMPANY SALES)
Sales volumes, tonnes | Q1 2018 | Q4 2017 | Change, % | Q1 2018 | Q1 2017 | Change, % | |
Coal: | 403,842 | 418,486 | (3%) | 403,842 | 473,233 | (15%) | |
Coking coal concentrate | 46,126 | 57,687 | (20%) | 46,126 | 7,677 | 501% | |
Steam coal | 357,716 | 360,799 | (1%) | 357,716 | 465,556 | (23%) | |
Iron ore: | 1,441,068 | 2,239,773 | (36%) | 1,441,068 | 1,341,387 | 7% | |
Iron ore pellets | 1,187,612 | 2,159,754 | (45%) | 1,187,612 | 1,341,387 | (11%) | |
Iron ore concentrate | 253,456 | 80,019 | 217% | 253,456 | 0 | n.a. | |
Semi-finished products | 256,159 | 217,935 | 18% | 256,159 | 117,042 | 119% | |
Rolled products: | 2,166,456 | 2,073,440 | 4% | 2,166,456 | 2,006,200 | 8% | |
Hot-rolled coil | 963,107 | 905,081 | 6% | 963,107 | 984,077 | (2%) | |
Hot-rolled plate | 198,205 | 239,361 | (17%) | 198,205 | 193,298 | 3% | |
Cold-rolled coil | 388,586 | 306,426 | 27% | 388,586 | 320,186 | 21% | |
Galvanised and metallic coated coil | 198,400 | 176,104 | 13% | 198,400 | 117,517 | 69% | |
Colour coated coil | 67,294 | 84,791 | (21%) | 67,294 | 84,404 | (20%) | |
Long products | 350,864 | 361,677 | (3%) | 350,864 | 306,718 | 14% | |
Downstream products: | 442,168 | 492,998 | (10%) | 442,168 | 406,939 | 9% | |
Metalware products | 128,251 | 129,123 | (1%) | 128,251 | 144,429 | (11%) | |
Large diameter pipes | 118,910 | 166,189 | (28%) | 118,910 | 68,367 | 74% | |
Other tubes, pipes, formed shapes | 195,007 | 197,686 | (1%) | 195,007 | 194,143 | 0% |
Investor Relations
Evgeny Belov
+7 (495) 926-77-66 ext. 6445
evgenii.belov@severstal.com
Public Relations
Anastasia Mishanina
+7 (495) 926-77-66 ext. 6457
anastasia.mishanina@severstal.com
Severstal's financial communications agency - Hudson Sandler Andrew Hayes / Emily Dillon / Dan de Belder +44 (0) 20 7796 4133
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OAO Severstal published this content on 10 April 2018 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 10 April 2018 06:20:06 UTC