TIDMEVR
RNS Number : 1931M
Evraz Plc
26 April 2018
EVRAZ Q1 2018 TRADING UPDATE
26 April 2018 - EVRAZ plc (LSE: EVR; "EVRAZ" or the "Group")
today released its trading update for the first quarter of
2018.
Please, note that starting Q1 2018 the Group will publish
Trading updates instead of Production reports.
The following key changes should be taken into
consideration:
1) Production and sales data were aligned with reporting
segments in EVRAZ' financial statements to improve
transparency.
2) Production volumes for saleable products were replaced with
the sales data, in which own produced products and the resale of
third-party product volumes were separated.
3) The cash costs for steel, iron ore and coking coal products
were added and will be reported within the trading updates on a
quarterly basis going forward.
4) Pig iron and crude steel production volumes were reported on
a "by plant" basis in the Steel and Steel, North America
segments.
5) Iron ore production volumes reflect the performance of the
following assets: EVRAZ KGOK and Evrazruda. The saleable
concentrate production volumes from Evrazruda replaced the data on
sinter produced at EVRAZ ZSMK.
6) Coking coal concentrate output at the Steel segment (EVRAZ
ZSMK's coal washing plant) has a breakdown by volumes produced from
own and from third-party raw coal.
Q1 2018 vs Q4 2017 HIGHLIGHTS:
-- In Q1 2018, EVRAZ' consolidated crude steel output fell by
5.5% QoQ to 3.3 million tonnes, primarily as a result of lower pig
iron production due to iron ore supply logistics limitation in the
view of severe weather conditions in January and February
(congelation of third party iron ore concentrate and pellets) as
well as the technical condition of blast furnaces no. 1 and no. 3
at EVRAZ ZSMK, shutdown of the blast furnace no.6 at EVRAZ NTMK and
the disposal of EVRAZ DMZ in March 2018.
-- Production of raw coking coal climbed by 6.7% QoQ to 6.0
million tonnes following the completion of scheduled longwall
repositioning at the Alardinskaya and Uskovskaya mines.
-- Total steel product sales dropped by 5.7% QoQ due to lower crude steel production. Sales of semi-finished products fell by 16.6%, primarily due to reduced pig iron and crude steel production. This was partly offset by a 5.7% increase in the output of finished products (mainly construction products, driven by stronger demand for rebars and channels).
-- Coking coal product sales declined by 10.0% QoQ, mainly due
to unusually high sales of raw coking coal in Q4 2017, which was
driven by higher sales prices and the need to reduce coking coal
inventories. Coking coal concentrate sales volumes grew by 9.8% QoQ
due to higher sales prices for coal concentrate and increased
export sales following the debottlenecking of logistics
capacity.
-- Iron ore product sales decreased by 4.3% QoQ due to
restocking of pellets, which has been made driven by expected
higher marginal sales to domestic market and scheduled repairs in
September.
-- Sales of vanadium products fell by 17.0% QoQ, mainly due to
lower FeV and oxide sales, resulting from reduced oxide
availability. The main reason for lower oxide availability was
reduced slag conversion at third parties resulting from slag
produced in 2017. Despite the fact of expected total lower slag
production during 2018 comparing to 2017, the aim is to increase
conversion of the slag produced in 2018 and accumulated from 2017
later in the year.
Product, '000 tonnes Q1 Q4 Q1 2018/ Q4 2017, change Q1 Q1 2018/ Q1 2017, change
2018 2017 2017
------------------------------------ ------ ------ ------------------------- ------ -------------------------
Total crude steel production 3,357 3,551 -5.5% 3,678 -8.7%
Russia 2,730 2,842 -3.9% 2,980 -8.4%
Ukraine 154 257 -40.0% 241 -36.1%
North America* 473 452 4.6% 457 3.5%
Total raw coking coal mined 5,969 5,593 6.7% 5,603 6.5%
Total coking coal concentrate
production 4,154 4,112 1.0% 3,605 15.2%
Iron ore production 3,431 3,352 2.4% 3,689 -7.0%
Total sales of steel products* 3,214 3,406 -5.7% 3,461 -7.2%
Semi-finished products 1,448 1,735 -16.6% 1,770 -18.2%
Finished products 1,766 1,671 5.7% 1,691 4.4%
Total sales of third-party steel
products 170 190 -10.5% 145 17.2%
Sales of coking coal products 2,801 3,111 -10.0% 2,136 31.1%
Sales of iron ore products 585 611 -4.3% 800 -26.9%
Sales of vanadium final products** 3,108 3,746 -17.0% 4,266 -27.1%
------------------------------------ ------ ------ ------------------------- ------ -------------------------
Note. Numbers in this table and the tables below may not add up
to totals due to rounding.
* Q1 2018 production and sales volumes of Evraz North America
are preliminary
** in tonnes of pure vanadium
STEEL SEGMENT
Total production volumes (RUSSIA and UKRAINE)
Product, '000 tonnes Q1 2018 Q4 2017 Q1 2018/ Q4 2017, change Q1 2017 Q1 2018/ Q1 2017, change
--------------------------------- -------- -------- ------------------------- --------- -------------------------
Pig iron production 2,571 2,805 -8.3% 2,894 -11.2%
EVRAZ ZSMK 1,397 1,468 -4.8% 1,429 -2.2%
EVRAZ NTMK 1,020 1,087 -6.2% 1,234 -17.3%
EVRAZ DMZ 153 251 -39.0% 232 -34.1%
Crude steel production 2,884 3,099 -6.9% 3,221 -10.5%
EVRAZ ZSMK 1,790 1,877 -4.6% 1,883 -4.9%
EVRAZ NTMK 940 964 -2.5% 1,097 -14.3%
EVRAZ DMZ 154 257 -40.1% 241 -36.1%
Iron ore products production 3,431 3,352 2.4% 3,689 -7.0%
Pellets (EVRAZ KGOK) 1,651 1,608 2.7% 1,634 1.0%
Sinter (EVRAZ KGOK) 831 833 -0.2% 898 -7.5%
Concentrate saleable (EVRAZ
KGOK, Evrazruda) 949 912 4.1% 1,157 -18.0%
Coking coal concentrate
production 522 546 -4.4% 481 8.5%
From own raw coal* 282 211 33.6% 221 27.6%
From third-party raw coal 240 336 -28.6% 260 -7.7%
Gross vanadium slag production** 4,020 4,372 -8.1% 4,553 -11.7%
--------------------------------- -------- -------- ------------------------- --------- -------------------------
Note. Numbers in this table and the tables below may not add up
to totals due to rounding.
* from Coal segment
** in tonnes of pure vanadium
In Q1 2018, EVRAZ' pig iron output at its Russian and Ukrainian
mills fell by 8.3% QoQ to 2.6 million tonnes. The main reasons were
logistics limitation of iron ore supplies because of severe weather
conditions in January and February (congelation of third party iron
ore concentrate and pellets) and lower productivity driven by
technical incidents at EVRAZ ZSMK's blast furnaces no. 1 and no. 3.
This decrease was accompanied by the shutdown of EVRAZ NTMK's blast
furnace no. 6 and the launch of blast furnace no. 7.
In Ukraine, pig iron production declined due to the disposal of
EVRAZ DMZ in March 2018 and unstable operations of EVRAZ DMZ' blast
furnace no. 3.
Crude steel output fell by 6.9% QoQ to 2.9 million tonnes
following a reduction in pig iron output.
Consolidated output of vanadium slag fell by 8.1% QoQ, which was
in line with lower pig iron production.
Total sales volumes (RUSSIA, UKRAINE, KAZAKHSTAN and EUROPE)
Product, '000 tonnes Q1 Q4 Q1 2018/ Q4 2017, change Q1 Q1 2018/
2018 2017 2017 Q1 2017, change
-------------------------------------------- ------- ------- ------------------------- ------- ------------------
Coke 85 109 -22.0% 49 73.5%
Steel products, external sales 2,730 2,939 -7.1% 2,992 -8.8%
Semi-finished products 1,448 1,735 -16.6% 1,770 -18.2%
Slabs 708 787 -10.1% 1,054 -32.9%
Billets 635 786 -19.2% 615 3.3%
Other steel products* 105 162 -35.3% 101 4.0%
Finished products 1,283 1,204 6.5% 1,222 5.0%
Construction products 735 644 14.1% 702 4.7%
Railway products 308 351 -12.2% 347 -11.3%
Flat products 94 70 34.3% 45 108.9%
Other steel products 146 140 4.3% 129 13.2%
Steel products, inter-segment sales 129 132 -2.3% 166 -22.5%
Sales of third-party steel products,
external sales 170 190 -10.5% 145 17.2%
Sales of iron ore products, external sales 585 611 -4.3% 800 -26.9%
Pellets 585 611 -4.3% 312 87.5%
Other 0 0 n/a 488 -100.0%
Sales of vanadium final products** 3,108 3,746 -17.0% 4,266 -27.1%
-------------------------------------------- ------- ------- ------------------------- ------- ------------------
Note. Numbers in this table and the tables below may not add to
totals due to rounding.
* includes tonnes of pig iron
** in tonnes of pure vanadium
In Q1 2018, external sales of steel products fell by 7.1% QoQ,
mostly due to lower crude steel production volumes. A reduction of
16.6% QoQ in sales of semi-finished products was partly offset by a
rise of 6.5% in sales of finished products (mainly construction
products, sales of which climbed by 14.1% QoQ, driven by stronger
demand for rebars and channels).
Sales of railway products fell by 12.2% QoQ amid lower
production due changes in the product mix and lower demand from
Russian Railways (RZhD) in January and February.
Sales of flat-rolled products rebounded by 34.3% QoQ due to
lower production at EVRAZ Palini e Bertoli in Q4 2017, which was
caused by a delay in the delivery of slabs, accompanied by a
shorter maintenance stop in January 2018 than in December 2017.
Iron ore product sales decreased by 4.3% QoQ due to restocking
of pellets, which has been made driven by expected higher marginal
sales to domestic market and scheduled repairs in September.
Sales of vanadium products fell by 17.0% QoQ, mainly due to
lower FeV and oxide sales, resulting from reduced oxide
availability. The main reason for lower oxide availability was
reduced slag conversion at third parties resulting from slag
produced in 2017. Despite the fact of expected total lower slag
production during 2018 comparing to 2017, the aim is to increase
conversion of the slag produced in 2018 and accumulated from 2017
later in the year.
Cash cost, USD/t Q1 Q4 Q1 2018/ Q4 2017, change Q1 Q1 2018/
2018 2017 2017 Q1 2017, change
---------------------------------------- ------ ------ ------------------------- ------- -----------------
Slab cash cost (vertically integrated) 256 257 -0.4 % 256 0.0 %
Iron ore products (Fe 62%) 38 41 -7.3 % 35 8.6 %
Average selling prices
US$/tonne (ex works) Q1 Q4 Q1
2018 2017 2017
------------------------------------------------------------- ------ ------- ------
Coke 264 219 207
Steel products 544 499 435
Semi-finished products* 439 423 341
Construction products 618 581 530
Railway products 720 661 621
Other steel products 628 595 516
Pellets 61 54 84
Metal Bulletin Ferro-Vanadium basis 78% min, free DDP,
consumer plant, 1st grade Western Europe** 61.90 39.28 25.31
Ryan's Notes N.A. FeV 80% min, US ex-warehouse, duty paid** 63.32 42.72 27.24
------------------------------------------------------------- ------ ------- ------
* includes prices for pig iron
** US$/kgV
In Q2 2018, the increase of pig iron production by c.9% is
expected amid absence of major repairs and launching of blast
furnace no.7 at EVRAZ NTMK. In Q2 2018, pellets production at EVRAZ
KGOK is expected to decrease by c.2% due to the scheduled repairs
in June.
STEEL, NORTH AMERICA SEGMENT
Production and sales volumes
Product, '000 tonnes Q1 Q4 Q1 2018/ Q4 2017, change Q1 Q1 2018/ Q1 2017, change
2018* 2017 2017
------------------------- ------- ------ ------------------------- ------- -------------------------
Crude steel 473 452 4.9% 457 3.5%
EVRAZ Pueblo 227 202 12.4% 201 12.9%
EVRAZ Regina 246 249 -1.2% 256 -3.9%
Sales of steel products 484 468 3.4% 469 3.0%
Construction products 69 59 17.0% 64 7.8%
Railway products 98 81 21.0% 95 3.2%
Flat-rolled products 135 110 22.7% 141 -4.3%
Tubular products 182 218 -16.5% 169 7.7%
------------------------- ------- ------ ------------------------- ------- -------------------------
* Q1 2018 production and sales volumes are preliminary
In Q1 2018, crude steel production grew by 4.9% QoQ, primarily
driven by improved rail and rod and bar order book at the EVRAZ
Pueblo mill.
Sales of construction products climbed by 17.0% QoQ, which
included a 13-day planned maintenance outage and downtime for the
Thanksgiving and Christmas holidays.
Railway products sales were up 21.0% QoQ, driven by improved
demand and downtime for the holidays in Q4 2017.
Sales of flat-rolled products surged by 22.7% QoQ due to lower
seasonal demand in Q4 2017 as customers reduce inventory at the
year-end, as well as stronger demand, partially driven by the
impact of Section 232 import tariffs.
Sales of tubular products dropped by 16.5% QoQ amid lower demand
for large-diameter line pipe.
Prices for all steel products rose during the reporting period,
reflecting higher prevailing prices for scrap and other inputs,
reduced pressure from imports and improving demand
fundamentals.
Average selling prices
US$/tonne (ex works) Q1 Q4 Q1
2018 2017 2017
----------------------- ------ ------ -------
Construction products 701 647 594
Flat-rolled products 770 768 742
Tubular products 1,243 1,195 980
----------------------- ------ ------ -------
In Q2 2018, crude steel output is expected to be slightly higher
than in the prior quarter, tubular product volumes to experience a
5%-10% increase in volume, flat-rolled products to climb 5-10% and
construction products and rail to remain strong, in line with the
levels seen in Q1 2018.
COAL SEGMENT
Production volumes
Product, '000 tonnes Q1 Q4 Q1 2018/ Q4 2017, change Q1 2017 Q1 2018/ Q1 2017, change
2018 2017
------------------------------------- ------- ------ ------------------------- -------- -------------------------
Raw coking coal (mined) 5,969 5,593 6.7% 5,603 6.5%
Yuzhkuzbassugol 2,720 2,468 10.2% 2,502 8.7%
Raspadskaya 3,008 2,876 4.6% 2,886 4.2%
Mezhegeyugol 241 249 -3.2% 215 12.1%
Coking coal concentrate (production) 3,631 3,566 1.8% 3,124 16.2%
Produced at Yuzhkuzbassugol coal
washing plants 1,770 1,826 -3.1% 1,491 18.7%
Produced at Raspadskaya coal
washing plant 1,861 1,741 6.9% 1,634 13.9%
------------------------------------- ------- ------ ------------------------- -------- -------------------------
In Q1 2018, production of raw coking coal rose by 6.7% QoQ,
primarily due to scheduled longwall repositioning at the
Alardinskaya and Uskovskaya mines in Q4 2017. Output of coking coal
concentrate was almost flat QoQ.
Sales volumes
Product, '000 tonnes Q1 Q4 Q1 2018/ Q4 2017, change Q1 Q1 2018/ Q1 2017, change
2018 2017 2017
--------------------------- ------ ------ ------------------------- ------- -------------------------
External sales 2,801 3,111 -10.0% 2,136 31.1%
Raw coking coal 156 703 -77.8% 190 -17.9%
Coking coal concentrate 2,644 2,407 9.8% 1,947 35.8%
Intersegment sales 1,443 1,482 -2.6% 1,526 -5.4%
Raw coking coal 396 300 32.0% 313 26.5%
Coking coal concentrate 1,047 1,182 -11.4% 1,212 -13.6%
--------------------------- ------ ------ ------------------------- ------- -------------------------
In Q1 2018, external sales volumes of raw coking coal dropped by
77.8% amid unusually high sales of raw coking coal in Q4 2017,
which was driven by higher sales prices and the need to reduce
coking coal inventories. Coking coal concentrate sales volumes grew
by 9.8% QoQ due to higher sales prices for coal concentrate and
increased export sales following the debottlenecking of logistics
capacity.
Cash cost, USD/t Q1 Q4 Q1 2018/ Q4 2017, change Q1 Q1 2018/ Q1 2017, change
2018 2017 2017
------------------------- ------ ------ ------------------------- ------- -------------------------
Coking coal concentrate 45 41 9.8% 44 2.3%
Average selling prices
Q1 Q4 Q1
US$/tonne (ex works) 2018 2017 2017
------------------------- ------ ------ ------
Raw coking coal 75 60 89
Coking coal concentrate 135 113 155
------------------------- ------ ------ ------
In Q1 2018, coking coal selling prices rose in line with global
benchmarks.
In Q2 2018, raw coal production is expected to slightly decrease
QoQ resulted from scheduled longwall repositioning at the
Raspadskaya mine started from the end of Q1 2018 and is expected to
be completed by Q3 2018.
Notes:
Semi-finished products include 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 products include commodity plate, specialty plate
and other flat products.
Tubular products include 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. They also include railway products for
Ukraine.
###
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, Kazakhstan,
USA, Canada, Czech Republic and Italy. EVRAZ is among the top steel
producers in the world based on crude steel production of 14
million tonnes in 2017. 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 2017 were US$10,827 million, and consolidated
EBITDA amounted to US$2,624 million.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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