TIDMEVR
RNS Number : 2704H
Evraz Plc
31 July 2019
EVRAZ Q2 2019 TRADING UPDATE
31 July 2019 - EVRAZ plc (LSE: EVR; "EVRAZ" or the "Group")
today released its trading update for the second quarter of
2019.
Q2 2019 vs Q1 2019 HIGHLIGHTS
-- In Q2 2019, EVRAZ' consolidated crude steel output remained flat QoQ.
-- Total steel product sales rose by 7.7% QoQ, driven by higher
demand. Sales of finished products climbed by 10.1% due to higher
sales of construction products in Russia and railway products in
North America.
-- Raw coking coal production grew by 2.2% QoQ. Raw coking coal
concentrate output climbed by 21% QoQ to 4.5mt, mainly due to
greater processing volumes and lower ash content.
-- External sales volumes of coking coal products surged by
10.3% QoQ due to increased coking coal concentrate sales after the
longwall repositioning at Yuzhkuzbassugol's Alardinskaya mine in Q1
2019 and greater shipments to Russia's Far East. This was partly
offset by lower raw coking coal sales amid lower demand at the
markets in Eastern Europe.
-- External sales of iron ore products dropped by 49.4% QoQ as
volumes were redistributed towards exports amid reduced demand on
the domestic market.
-- Sales of final vanadium products rose by 29.7% QoQ, as lower
prices and FeV stocks at end users have stimulated spot demand,
particularly in the EU, Asia and North America.
Product, kt Q2 Q1 Q2 2019/ Q1 2019, change H1 2019/ H1 2018, change
2019 2019 H1 2019 H1 2018
-------------------------- ------ ------ ------------------------- --------- --------- -------------------------
Total crude steel
production 3,507 3,488 0.5% 6,995 6,814 2.7%
Russia 3,006 2,986 0.7% 5,992 5,726 4.6%
Ukraine 0 0 n/a 0 154 -100%
North America 501 502 -0.2% 1,003 934 7.4%
Total raw coking coal
mined 6,996 6,844 2.2% 13,840 11,391 21.5%
Total coking coal
concentrate
production 4,458 3,684 21.0% 8,142 8,061 1.0%
Iron ore products
production 3,533 3,636 -2.8% 7,169 6,855 4.6%
Total sales of steel
products(1) 3,377 3,135 7.7% 6,512 6,220 4.7%
Semi-finished products 1,395 1,335 4.5% 2,730 2,516 8.5%
Finished products(2) 1,982 1,800 10.1% 3,782 3,704 2.1%
Total sales of
third-party steel
products 221 180 22.8% 401 417 -3.8%
Sales of coking coal
products 2,929 2,656 10.3% 5,585 5,599 -0.3%
Sales of iron ore
products(3) 235 464 -49.4% 699 1,089 -35.8%
Sales of Vanadium in
slag(3) 1,660 1,176 41.2% 2,836 2,814 0.8%
Sales of vanadium final
products(4) 3,266 2,518 29.7% 5,784 6,456 -10.4%
-------------------------- ------ ------ ------------------------- --------- --------- -------------------------
Note. Numbers in this table and the tables below may not add up
to totals due to rounding.
(1) The Q2 2019 production and sales volumes of EVRAZ North
America are preliminary.
(2) The Q1 2019 data have been adjusted.
(3) The H1 2018 data have been adjusted.
(4) in tonnes of pure vanadium
STEEL SEGMENT
Total production volumes
Product, kt Q2 2019 Q1 2019 Q2 2019/ Q1 2019, H1 2019 H1 2018 H1 2019/ H1 2018, change
change
------------------------- -------- -------- ------------------------ -------- -------- -------------------------
Pig iron production 2,745 2,712 1.2% 5,457 5,252 3.9%
EVRAZ ZSMK 1,530 1,471 4.0% 3,001 2,912 3.1%
EVRAZ NTMK 1,215 1,241 -2.1% 2,456 2,186 12.4%
EVRAZ DMZ 0 0 n/a 0 153 -100%
Crude steel production 3,006 2,986 0.7% 5,992 5,880 1.9%
EVRAZ ZSMK 1,942 1,895 2.5% 3,837 3,752 2.3%
EVRAZ NTMK 1,064 1,091 -2.5% 2,155 1,974 9.2%
EVRAZ DMZ 0 0 n/a 0 154 -100%
Total steel products
production, net of
re-rolled
volume 2,759 2,622 5.2% 5,381 5,225 3.0%
EVRAZ ZSMK 1,737 1,686 3.0% 3,423 3,388 1.0%
EVRAZ NTMK 844 794 6.3% 1,638 1,430 14.5%
EVRAZ DMZ 0 0 n/a 0 132 -100%
EVRAZ Palini e Bertoli 101 97 4.1% 198 186 6.5%
EVRAZ Caspian Steel 77 45 71.1% 122 89 36.0%
Iron ore products
production 3,533 3,636 -2.8% 7,169 6,855 4.6%
Pellets (EVRAZ KGOK) 1,573 1,643 -4.3% 3,216 3,277 -1.9%
Sinter (EVRAZ KGOK) 928 898 3.3% 1,826 1,735 5.2%
Concentrate (EVRAZ
KGOK, Evrazruda) 1,032 1,095 -5.8% 2,127 1,843 15.4%
Coking coal concentrate
production 489 454 7.7% 943 1,041 -9.3%
From own raw coal(1) 341 256 33.2% 597 601 -0.7%
From third-party raw
coal 148 198 -25.3% 346 440 -21.2%
Gross vanadium slag
production(2) 4,533 4,446 2.0% 8,979 8,414 6.7%
------------------------- -------- -------- ------------------------ -------- -------- -------------------------
Note. Numbers in this table and the tables below may not add up
to totals due to rounding.
(1) from Coal segment
(2) in tonnes of pure vanadium
In Q2 2019, EVRAZ` pig iron and crude steel output remained
mostly flat QoQ at the Russian mills.
Output of iron ore products fell by 2.8% QoQ to 3.5mt, mainly
due to unscheduled downtime of burning machine no. 1 at EVRAZ KGOK
and a planned maintenance outage of the Tashtagol mine at
Evrazruda.
Total sales volumes
Product, kt Q2 Q1 Q2 2019/ H1 2019 H1 2018 H1 2019/ H1 2018, change
2019 2019 Q1 2019, change
------------------------------------ ------ ------ ----------------- -------- -------- -------------------------
Coke 113 65 73.8% 178 184 -3.3%
Steel products, external sales 2,746 2,583 6.3% 5,329 5,185 2.8%
Semi-finished products 1,293 1,279 1.1% 2,572 2,505 2.7%
Slabs 572 482 18.7% 1,054 962 9.6%
Billets 545 646 -15.6% 1,191 1,301 -8.5%
Other steel products(1) 176 151 16.6% 327 242 35.1%
Finished products 1,453 1,304 11.4% 2,757 2,680 2.9%
Construction products 808 729 10.8% 1,537 1,541 -0.3%
Railway products 367 343 7.0% 710 669 6.1%
Flat products 98 91 7.7% 189 188 0.5%
Other steel products 180 141 28.6% 320 282 13.5%
Steel products, inter-segment sales 115 186 -38.2% 301 303 -0.7%
Third-party steel products,
external sales 221 180 22.8% 401 417 -3.8%
Iron ore products, external sales 235 464 -49.4% 699 1,089 -35.8%
Pellets 235 464 -49.4% 699 1,089 -35.8%
Sales of vanadium in slag(2) 1,660 1,176 41.2% 2,836 2,814 0.8%
Sales of vanadium final products(3) 3,266 2,518 29.7% 5,784 6,456 -10.4%
------------------------------------ ------ ------ ----------------- -------- -------- -------------------------
Note. Numbers in this table and the tables below may not add to
totals due to rounding.
(1) includes tonnes of pig iron
(2) The H1 2018 data have been adjusted.
(3) in tonnes of pure vanadium
In Q2 2019, external sales of steel products rose by 6.3% QoQ,
primarily due to higher demand. Sales of semi-finished products
were mostly flat QoQ.
Sales of finished products grew by 11.4% QoQ, mainly driven by
higher sales of construction products, which rose by 10.8% QoQ
following an uptick in demand due to the construction season.
Sales of final vanadium products climbed by 29.7% QoQ, as lower
prices and FeV stocks at end users have stimulated spot demand,
particularly in the EU, Asia and North America.
Cash cost, US$/t Q2 Q1 Q2 2019/ Q1 2019, change H1 H1 H1 2019/ H1 2018, change
2019 2019 2019 2018
------------------------------ ------ ------ ------------------------- ------- ------- -------------------------
Slab cash cost vertically
integrated 238 223 6.7% 230 248 -7.2%
Iron ore products (Fe 62%) 38 37 2.7% 38 37 2.7%
------------------------------ ------ ------ ------------------------- ------- ------- -------------------------
Average selling prices
US$/t (ex works) Q2 Q1 H1 H1
2019 2019 2019 2018
-------------------------------------------------------------- ------ ------ ------ ------
Coke 240 223 233 255
Steel products 517 481 499 551
Semi-finished products(1) 392 381 387 462
Construction products 601 522 563 613
Railway products 763 743 753 702
Other steel products 598 593 596 635
Pellets 81 75 77 63
Metal Bulletin Ferro-Vanadium basis 78% min, free DDP,
consumer plant, 1st grade Western Europe(2) 39.36 73.33 56.35 65.53
Ryan's Notes N.A. FeV 80% min, US ex-warehouse, duty paid(2) 47.81 87.93 67.87 69.51
-------------------------------------------------------------- ------ ------ ------ ------
(1) includes prices for pig iron
(2) US$/kgV
In Q3 2019, pig iron and crude steel production volumes are
expected to remain flat.
STEEL, NORTH AMERICA SEGMENT
Production and sales volumes(1)
Product, kt Q2 Q1 2019 Q2 2019/ H1 2019 H1 2018 H1 2019/ H1 2018, change
2019 Q1 2019, change
---------------------------------- ------ -------- ----------------- -------- -------- -------------------------
Crude steel 501 502 -0.2% 1,003 934 7.4%
EVRAZ US mills 255 235 8.5% 490 446 9.8%
EVRAZ Canadian mills 246 267 -7.9% 513 488 5.1%
Total steel products production,
net of re-rolled volume 615 559 10.0% 1,174 1,110 5.8%
EVRAZ US mills 397 351 13.1% 748 683 9.5%
EVRAZ Canadian mills 218 208 4.8% 426 427 -0.2%
Sales of steel products 631 553 14.1% 1,184 1,034 14.5%
Semi-finished products 102 56 82.1% 158 11 1336.4%
Construction products 70 67 4.5% 137 142 -3.5%
Railway products 120 101 18.8% 221 208 6.3%
Flat-rolled products 147 140 5.0% 287 302 -5.0%
Tubular products 192 189 1.6% 381 371 2.7%
---------------------------------- ------ -------- ----------------- -------- -------- -------------------------
(1) The Q2 2019 production and sales volumes data are
preliminary.
In Q2 2019, total output of steel products surged by 10.0% QoQ,
with EVRAZ Pueblo's output up 13.1% QoQ amid greater downstream
demand following the rail mill restart after unplanned downtime in
Q1 2019.
Sales of semi-finished products jumped by 82.1% QoQ following
higher demand from customers.
Sales of construction products rose by 4.5% QoQ due to higher
demand and favourable weather.
Railway product sales climbed by 18.8% QoQ, as production
volumes recovered after the rail mill outage in Q1 2019.
Sales of flat-rolled products went up by 5.0% QoQ as a result of
a planned maintenance outage and a railcar supply shortages in Q1
2019.
Tubular product sales edged up by 1.6% QoQ due to the restart of
coating operations at EVRAZ Regina.
Average selling prices
US$/t (ex works) Q2 Q1 H1 H1
2019 2019 2019 2018
----------------------- ------ ------ ------ ------
Construction products 769 848 808 758
Flat-rolled products 949 1,048 997 892
Tubular products 1,360 1,374 1,367 1,224
----------------------- ------ ------ ------ ------
Prices for construction products went down in Q2 2019, primarily
driven by falling scrap prices and sluggish market demand. Prices
for flat-rolled products were lower during the period as service
centres temporarily curtailed purchases amid rapidly falling scrap
prices and market uncertainty, which in turn was driven by soft
demand. Prices for tubular products decreased slightly during Q2
2019, reflecting softening oil country tubular goods (OCTG) markets
in addition to a seasonal decline in demand.
In Q3 2019, crude steel output is expected to remain at the
average level seen in Q1-Q2 2019. Tubular sales volumes should
increase compared with Q2 2019, as OCTG is expected to show
healthier volumes. Meanwhile, volumes of line pipe and
large-diameter pipe are expected to benefit from delayed coating
and delivery recognition in Q2 2019. Sales of flat-rolled products
are forecast to marginally improve over the Q2 2019 volumes, driven
by customer production schedules and an expected uptick in
purchasing activity from service centres.
COAL SEGMENT
Production volumes
Product, kt Q2 Q1 Q2 2019/ Q1 2019, Change H1 2019 H1 2018 H1 2019/ H1 2018, change
2019 2019
---------------------------- ------ ------ ------------------------- -------- -------- -------------------------
Raw coking coal (mined) 6,996 6,844 2.2% 13,840 11,391 21.5%
Yuzhkuzbassugol 3,466 2,606 33.0% 6,072 5,475 10.9%
Raspadskaya 3,231 3,916 -17.5% 7,147 5,438 31.4%
Mezhegeyugol 299 322 -7.1% 621 478 29.9%
Coking coal concentrate
(production) 3,969 3,229 22.9% 7,198 7,020 2.5%
Produced at
Yuzhkuzbassugol coal
washing plants 1,837 1,433 28.2% 3,270 3,495 -6.4%
Produced at the
Raspadskaya coal
washing plant 2,132 1,796 18.7% 3,928 3,525 11.4%
---------------------------- ------ ------ ------------------------- -------- -------- -------------------------
In Q2 2019, overall raw coking coal output rose by 2.2% QoQ,
primarily due to higher production at Yuzhkuzbassugol's mines
following a longwall move at the Alardinskaya mine in Q1 2019. This
was partly offset by lower production volumes at the Raspadskaya
mine due to a longwall move in Q2 2019.
Output of coking coal concentrate climbed by 22.9%, primarily
due to greater processing volume and reduced ash content.
Sales volumes
Product, kt Q2 Q1 Q2 2019/ Q1 2019, change H1 H1 H1 2019/ H1 2018, change
2019 2019 2019 2018
--------------------------- ------ ------ ------------------------- ------ ------ -------------------------
External sales 2,929 2,656 10.3% 5,585 5,599 -0.3%
Raw coking coal 447* 497 -10.1% 943* 807 16.9%
Coking coal concentrate 2,482 2,160 14.9% 4,642 4,792 -3.1%
Intersegment sales 1,650 1,519 8.6% 3,169 2,932 8.1%
Raw coking coal 556 396 40.4% 952 910 4.6%
Coking coal concentrate 1,094 1,123 -2.6% 2,217 2,022 9.6%
--------------------------- ------ ------ ------------------------- ------ ------ -------------------------
* The data include sales volumes of 1kt of coal recognised as
steam-grade coal based on its quality characteristics.
In Q2 2019, external sales volumes of coking coal products
surged by 10.3% due to increased coking coal concentrate sales
after the longwall repositioning at Yuzhkuzbassugol's Alardinskaya
mine in Q1 2019 and greater shipments to Russia's Far East, which
was partly offset by lower raw coking coal sales amid lower demand
at the markets in Eastern Europe.
Cash cost, US$/t Q2 Q1 Q2 2019/ Q1 2019, change H1 H1 H1 2019/ H1 2018, change
2019 2019 2019 2018
---------------------------- ------ ------ ------------------------- ------- ------- -------------------------
Coking coal concentrate(1) 33 35 -5.7% 34 47 -27.7%
---------------------------- ------ ------ ------------------------- ------- ------- -------------------------
(1) The Q1 2019 data have been adjusted.
Average selling prices
Q2 Q1 H1 H1
US$/t (ex works) 2019 2019 2019 2018
------------------------- ------ ------ ------ ------
Raw coking coal 96 57 65 70
Coking coal concentrate 94 117 108 127
------------------------- ------ ------ ------ ------
In Q2 2019, coking coal selling prices moved in line with global
benchmarks.
In Q3 2019, raw coal production is expected to decline QoQ due
to the longwall move at the Uskovskaya mine. Output will also be
impacted by reduced production at Razrez Raspadsky due to the
transfer of its equipment to the open-pit mining operations at the
Raspadskaya-Koksovaya mine.
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, US,
Canada, Czech Republic and Italy. EVRAZ is among the top steel
producers in the world based on crude steel production of 13mt in
2018. 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
2018 were US$12,836m and consolidated EBITDA amounted to
US$3,777m.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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