TIDMEVR
RNS Number : 6680K
Evraz Plc
20 April 2015
EVRAZ Q1 2015 PRODUCTION REPORT
20 April 2015 - EVRAZ plc (LSE: EVR) today releases its
operational results for the first quarter of 2015.
Q1 2015 vs Q4 2014 OPERATIONAL HIGHLIGHTS:
-- Consolidated crude steel output was stable at 3.9 million
tonnes per quarter with Russian steel mills running at full
capacity
-- Production of steel products, net of re-rolled volumes, was unchanged at 3.7 million:
o 5% higher production of semi-finished products for export
supported by EVRAZ's low cost position and devaluation of the
Russian rouble and Ukrainian hryvnia, and a 7% growth in production
of railway products in Russia and North America due to increased
orders from EVRAZ's key customers
o the decline in production volumes for other steel products
caused by the lower demand and increased competition for
construction products in Russia and for flat-rolled products in
North America
-- The share of finished steel products within consolidated
volumes went down to 61% in Q1 2015 from 63% in Q4 2014 due to
increasing output of semi-finished products for exports primarily
as a result of a weaker demand for construction products in the
Russian market
-- Consolidated raw coking coal output and production of coking
coal concentrate decreased by 9% and 10% respectively due to lower
output of the Raspadskaya coal company primarily as a result of a
planned longwall move at one of its mines
STEEL
Product, '000 tonnes Q1 2015 Q4 2014 Q1 2015/ Q1 Q1 2015/ Q1 2014, change
Q4 2014, change 2014***
------------------------------------- -------- -------- ------------------ --------- -------------------------
Coke (saleable) 285 304 -6.2% 255 11.5%
Pig iron 3,131 3,143 -0.4% 2,991 4.7%
Pig iron (saleable) 71 133 -47.0% 77 -8.4%
Crude steel 3,917 3,864 1.4% 3,875 1.1%
Steel products, gross 3,814 3,859 -1.1% 3,781 0.9%
Steel products, net of re-rolled
volumes 3,659 3,665 -0.2% 3,366 8.7%
Semi-finished products ** 1,440 1,370 5.1% 867 66.1%
Finished products 2,219 2,295 -3.3% 2,499 -11.2%
Construction products 1,183 1,252 -5.5% 1,217 -2.8%
Railway products 401 376 6.6% 508 -21.0%
Flat-rolled products 209 234 -10.6% 344 -39.3%
Tubular products 264 277 -4.4% 271 -2.5%
Other steel products 162 156 3.6% 159 1.8%
------------------------------------- -------- -------- ------------------ --------- -------------------------
Note. Numbers in this table and the tables below may not add to
totals due to rounding.
* Gross volume of steel products in the tables includes those
re-rolled at other EVRAZ's mills. However, such volumes are
eliminated as intercompany sales for purposes of EVRAZ's
consolidated operating results.
** Consolidated production volumes of semi-finished products are
preliminary as intra-group re-rolling volumes are yet to be
finalised.
*** Includes production volumes of EVRAZ Vitkovice Steel
disposed of in April 2014.
RUSSIA
Product, '000 tonnes Q1 2015 Q4 2014 Q1 2015/ Q1 2014 Q1 2015/ Q1 2014, change
Q4 2014, change
---------------------------------------- -------- -------- ----------------- -------- -------------------------
Coke (saleable) 76 111 -30.9% 111 -30.8%
Pig iron 2,744 2,729 0.5% 2,591 5.9%
Pig iron (saleable) 49 87 -43.9% 74 -34.6%
Crude steel 3,055 2,979 2.6% 2,852 7.1%
Steel products, gross 2,868 2,891 -0.8% 2,649 8.2%
Steel products, net of re-rolled
volumes 2,802 2,815 -0.5% 2,582 8.5%
Semi-finished products 1,421 1,406 1.1% 1,086 30.9%
Finished products 1,381 1,409 -2.0% 1,497 -7.7%
Construction products* 981 1,033 -5.0% 993 -1.2%
Railway products 258 237 8.5% 376 -31.5%
Other steel products 142 139 1.7% 127 11.4%
---------------------------------------- -------- -------- ----------------- -------- -------------------------
* Includes 73kt and 65kt produced in Q1 2015 and Q4 2014
respectively by EVRAZ Caspian Steel mill in Kazakhstan from EVRAZ
ZSMK's billets
In Q1 2015 Russian steel mills were 100% utilised with crude
steel output growing by 3% QoQ. Production of steel products
remained largely unchanged compared to Q4 2014. In the past two
quarters the volumes were distributed equally between semi-finished
and finished goods reflecting both the seasonality (demand and
number of working days in the quarter) and demand contraction in
Russia. Production of construction products was most affected
having gone down by 5% QoQ.
Production of railway products, including rails, surged by 9%
due to higher consumption by Russian Railways for track maintenance
purposes as well as increased export volumes for Latin American and
Middle East markets.
In Q1 2015, Russian steel producers, EVRAZ included, raised
domestic prices for steel products in roubles partially eliminating
the dispropotion caused by steep Russian rouble devaluation versus
the US dollar in Q4 2014. As a result, prices went up by 5-7% in US
dollar terms QoQ.
In Q2 2015, steel production is expected to decrease compared to
Q1 2015 as a result of total 24-day scheduled maintenance works at
the EVRAZ NTMK's blast furnaces.
Average selling prices
USD/tonne (ex works) Q1 2015 Q4 2014 Q1 2014
-------------------------- -------- -------- --------
Coke 118 92 128
Pig iron 366 261 305
Steel products
Semi-finished products 404 392 406
Construction products 516 484 569
Railway products 652 613 775
Other steel products 616 517 594
-------------------------- -------- -------- --------
NORTH AMERICA
Product, '000 tonnes Q1 2015 Q4 2014 Q1 2015/ Q1 2014 Q1 2015/ Q1 2014, change
Q4 2014, change
---------------------------------------- -------- -------- ----------------- -------- -------------------------
Crude steel 480 509 -5.6% 491 -2.1%
Steel products, net of re-rolled
volumes 627 647 -3.1% 639 -1.8%
Construction products 76 71 5.9% 85 -11.3%
Railway products 143 139 3.2% 132 8.9%
Flat-rolled products 144 160 -10.3% 151 -4.4%
Tubular products 264 277 -4.4% 271 -2.5%
---------------------------------------- -------- -------- ----------------- -------- -------------------------
* Q1 2015 production volumes are preliminary
In Q1 2015, crude steel production declined by 6% compared to Q4
2014 due to the 6-day outage of the steel shop at EVRAZ Regina. The
reduction in demand for oil country tubular goods (OCTG) in Canada
was the main cause for the decrease in production of steel products
and of tubular goods, primarily of OCTG, by 3% and 4%
respectively.
Flat-rolled products output, in particular commodity plate
produced at EVRAZ Portland, decreased as a result of distributors
reducing their substantial inventory over-hang of imported
plate.
Rail production improved by 3% QoQ supported by strong demand
from Class 1 railroads.
Prices for most steel products decreased from previous quarter
due to reductions in scrap prices and to the effect of distributor
de-stocking in plate and OCTG products.
Average selling prices
USD/tonne (ex works) Q1 2015 Q4 2014 Q1 2014
----------------------- -------- -------- --------
Construction products 707 771 795
Flat-rolled products 938 936 919
Tubular products 1,285 1,339 1,290
----------------------- -------- -------- --------
UKRAINE
Product, '000 tonnes Q1 2015 Q4 2014 Q1 2015/ Q1 2014 Q1 2015/ Q1 2014, change
Q4 2014, change
-------------------------- -------- -------- ----------------- -------- -------------------------
Coke (saleable) 208 193 8.0% 145 43.7%
Pig iron 236 246 -4.0% 248 -4.8%
Pig iron (saleable) 22 47 -52.7% 3 693.4%
Crude steel 233 217 7.5% 253 -7.9%
Steel products 196 189 3.7% 214 -8.4%
Semi-finished products 104 80 29.4% 121 -13.9%
Finished products 92 109 -15.2% 94 -1.3%
Construction products 79 97 -18.5% 74 7.1%
Other steel products 14 12 11.2% 20 -32.2%
-------------------------- -------- -------- ----------------- -------- -------------------------
In Q1 2015, EVRAZ DMZ steel mill extended crude steel output by
8% compared to Q4 2014 when it had been impacted by reduced
electricity supply in the country.
Production of steel products rose by 4% QoQ on the back of a 30%
increase of semi-finished products for export. Deterioration of the
economic environment in Ukraine and softening demand in the Russian
market resulted in a decline in production of finished, mostly
construction, products.
Average selling prices
USD/tonne (ex works) Q1 2015 Q4 2014 Q1 2014
-------------------------- -------- -------- --------
Coke (saleable) 191 190 179
Pig iron 237 308 351
Steel products
Semi-finished products 350 402 449
Construction products 415 512 583
Other steel products 528 758 894
-------------------------- -------- -------- --------
SOUTH AFRICA
Product, '000 tonnes Q1 2015 Q4 2014 Q1 2015/ Q1 2014 Q1 2015/ Q1 2014, change
Q4 2014, change
-------------------------- -------- -------- ----------------- -------- -------------------------
Pig iron 151 168 -10.4% 152 -1.1%
Crude steel 149 160 -6.9% 150 -0.3%
Steel products 123 131 -6.4% 149 -17.6%
Semi-finished products 4 2 93.5% 9 -50.2%
Finished products 119 129 -8.1% 141 -15.6%
Construction products 47 51 -8.1% 43 8.8%
Flat-rolled products 65 73 -11.1% 90 -27.9%
Other steel products 6 5 42.2% 7 -7.8%
-------------------------- -------- -------- ----------------- -------- -------------------------
In March 2015, the situation in the local market became
difficult compared to Q4 2014 and the first two months of 2015,
nullifying the positive effect of the turnaround plan which EVRAZ
Highveld's management team had been implementing.
In view of the deteriorating business environment, the Board of
Directors of EVRAZ Highveld decided to file for voluntary business
rescue procedures. Starting 14 April 2015 EVRAZ Highveld has been
managed by an independent rescue practitioner.
Average selling prices
USD/tonne (ex works) Q1 2015 Q4 2014 Q1 2014
------------------------ -------- -------- --------
Semi-finished products 443 415 440
Construction products 689 693 642
Flat-rolled products 588 602 606
Other steel products 542 485 574
------------------------ -------- -------- --------
IRON ORE
Product, '000 tonnes Q1 2015 Q4 2014 Q1 2015/ Q1 2014 Q1 2015/ Q1 2014, change
Q4 2014, change
-------------------------- -------- -------- ----------------- -------- -------------------------
Sinter (Russia) 2,837 2,673 6.2% 2,788 1.8%
Pellets (Russia) 1,631 1,660 -1.8% 1,572 3.7%
Lumpy ore (Ukraine) 667 735 -9.2% 736 -9.3%
Fines ore (South Africa) 151 196 -23.3% 139 8.0%
Lumpy ore (South Africa) 274 411 -33.4% 293 -6.6%
-------------------------- -------- -------- ----------------- -------- -------------------------
In Q1 2015, production of iron ore products (sinter plus
pellets) in Russia stabilised growing by 3% QoQ after completion of
maintenance works at one of EVRAZ ZSMK's sintering machines in
November 2014. The slight decline (-2%) in production of pellets by
EVRAZ KGOK is attributable to fewer working days in the quarter.
The share of EVRAZ's own concentrate in production of sinter and
pellets in Russia remained unchanged at 79%.
In Ukraine, higher demand for better quality product (Fe 60%)
requiring additional beneficiation of lumpy ore with Fe 56% content
resulted in a 9% decrease in production compared to Q4 2014.
The fall in production of iron ore at EVRAZ Highveld's Mapochs
mine in South Africa was a result of high inventory volumes due to
sagging consumption by EVRAZ Highveld and external customers.
Average selling prices
USD/tonne (ex works) Q1 2015 Q4 2014 Q1 2014
-------------------------- -------- -------- --------
Sinter (Russia) 37 34 74
Pellets (Russia) 45 45 88
Lumpy ore (Ukraine) 32 36 66
Fines ore (South Africa) 24 39 13
-------------------------- -------- -------- --------
COAL
Product, '000 tonnes Q1 2015 Q4 Q1 2015/ Q1 2014 Q1 2015/
2014 Q4 2014, Q1 2014,
change change
------------------------- -------- ------ ---------- -------- ----------
Raw coking coal (mined) 5,467 5,972 -8.5% 4,724 15.7%
Yuzhkuzbassugol 2,626 2,585 1.6% 2,867 -8.4%
Raspadskaya 2,802 3,337 -16.0% 1,857 50.9%
Mezhegeyugol 39 51 -23.5% 0 n/a
Coking coal concentrate
(production) 3,385 3,770 -10.2% 3,285 3.0%
------------------------- -------- ------ ---------- -------- ----------
Coking coal
In Q1 2015, production of raw coking coal and coking coal
concentrate by EVRAZ went down by 9% and 10% respectively compared
to Q4 2014 due to a decline in production of raw coal by the
Raspadskaya coal company. The Raspadskaya coal company's output
decreased by 16% QoQ as a result of a planned longwall move at the
Raspadskaya Koksovaya mine and unfavourable geological factors at
its MUK-96 mine.
Average selling prices
USD/tonne (ex works) Q1 2015 Q4 2014 Q1 2014
------------------------- -------- -------- --------
Raw coking coal 37 37 51
Coking coal concentrate 54 57 81
------------------------- -------- -------- --------
VANADIUM
Product, tonnes of V* Q1 2015 Q4 Q1 2015/ Q1 2014 Q1 2015/
2014 Q4 2014, Q1 2014,
change change
--------------------------------- -------- ------ ---------- -------- ----------
Vanadium slag, gross production 5,917 6,048 -2.2% 4,989 18.6%
Vanadium in final products
(saleable) 5,199 4,492 15.7% 4,891 6.3%
--------------------------------- -------- ------ ---------- -------- ----------
(*) Calculated in pure vanadium equivalent
In Q1 2015, Vanadium slag production was 2% down compared to Q4
2014 due to lower output in South Africa (-12%) as a result of
reduced steel production at EVRAZ Highveld.
Production of final vanadium products increased by almost 16%,
mainly driven by strong demand for ferrovanadium in Russia and good
feedstock availability. Besides, higher Nitrovan(R) production was
supported by improved shaft performance at EVRAZ Vametco in South
Africa.
Production of oxides, vanadium aluminum and chemicals was flat
QoQ.
Ferrovanadium price quotations decreased by 10.9% of LMB and
11.6% of Ryan's Notes in Q1 2015 compared to Q4 2014. EVRAZ`s
average selling pricing followed this downward trend.
Average FeV indices
USD/tonne of V (ex works) Q1 2015 Q4 2014 Q1 2014
-------------------------------------------------------------------------------------- -------- -------- --------
Metal Bulletin Ferro-vanadium basis 78% min, free DDP, consumer plant, 1st grade
Western Europe 21,850 24,516 25,463
Ryan's Notes N.A. FeV 80% min, US ex-warehouse, duty paid 24,948 28,216 28,869
-------------------------------------------------------------------------------------- -------- -------- --------
Notes:
Semi-finished productsinclude slabs, billets, pipe blanks and
other semi-finished products.
Construction products include beams, channels, angles, rebars,
wire rods, wire, and other construction products.
Railway products include rails, wheels, tyres and other railway
products.
Flat-rolled productsinclude commodity plate, specialty plate and
other flat products.
Tubular productsinclude large diameter line pipes, ERW pipes and
casings, seamless pipes and other tubular products.
Other steel products include rounds, grinding balls, mine
uprights, strips etc. For Ukraine they also include railway
products, for South Africa - rails.
###
For further information:
Media Relations:
London: +44 207 832 8998 Moscow: +7 495 937 6871
media@evraz.com
Investor Relations:
London: +44 207 832 8990 Moscow: +7 495 232 1370
ir@evraz.com
EVRAZ is a vertically integrated steel, mining and vanadium
business with operations in the Russian Federation, Ukraine,
Kazakhstan, USA, Canada, Czech Republic, Italy and South Africa.
EVRAZ is among the top steel producers in the world based on crude
steel production of 16.1 million tonnes in 2013. A significant
portion of the company's internal consumption of iron ore and
coking coal is covered by its mining operations. The company's
consolidated revenues for the year ended 31 December 2014 were
US$13,061 million, and consolidated EBITDA amounted to US$2,325
million.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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