TIDMEVR
RNS Number : 0575A
Evraz Plc
31 January 2022
EVRAZ Q4 2021 TRADING UPDATE
31 January 2022 - EVRAZ plc (LSE: EVR; "EVRAZ" or the "Group")
today released its trading update for the fourth quarter and full
year of 2021.
Q4 2021 vs Q3 2021 HIGHLIGHTS
-- In Q4 2021, EVRAZ' consolidated crude steel output fell by
0.6% QoQ, mainly because of maintenance outages in November in
North America.
-- Total sales of steel products increased by 7.0% QoQ. Sales of
construction products were buoyed by market demand in the period,
while sales of railway products were higher following the
completion of capital repairs at EVRAZ ZSMK's rail and beam shop
and EVRAZ NTMK's wheel shop.
-- Total raw coking coal production surged by 34.4% QoQ, mainly
because of the completion of longwall moves at the Raspadskaya,
Osinnikovskaya and Yerunakovskaya- VIII mines.
-- Coking coal concentrate production grew by 11.2% QoQ amid greater coal mining volumes.
-- External sales volumes of coking coal products rose by 4.0%
QoQ, as an increase in coal mining volumes allowed for greater
coking coal concentrate sales volumes amid favourable market
conditions.
-- Output of iron ore products climbed by 7.0% QoQ, driven by
higher production volumes of pellets at EVRAZ KGOK and higher
production of saleable concentrate at EVRAZ ZSMK following the
completion of capital repairs.
-- External sales of iron ore products jumped by 58.1% QoQ
following the start of sales to China through the port of
Ust-Luga.
-- Sales of vanadium products surged by 33.0% QoQ, primarily due
to higher demand in Europe and North America.
FY2021 vs FY2020 HIGHLIGHTS
-- The Group's consolidated crude steel production edged down by
0.4% YoY, as crude steel production volumes fell after Russia
introduced an export duty (effective until the end of 2021), which
led to lower margins from pig iron production at EVRAZ ZSMK.
-- Total sales of steel products dropped by 4.5% YoY. This was
partly because of the impact that the export duty introduced in
Russia in 2021 had on the output of semi-finished products for
export, and partly because of a high-base effect following the
fulfilment of a contract with the key customer in 2020 in North
America.
-- Production of raw coking coal grew by 12.7% YoY. The main
driver of the increase was the resumption of work at Razrez
Raspadsky, which had halted operations from May to September 2020
amid poor market conditions. Another contributor was the transfer
of operations at Esaulskaya to the new longwall no. 29.
-- Coking coal concentrate production grew by 2.8% YoY following
the increase in coal mining volumes.
-- External sales volumes of coking coal products fell by 14.0%
YoY amid lower raw coking coal sales following the change in the
product mix in favour of coking coal concentrate to meet customer
needs.
-- Output of iron ore products rose by 1.4% YoY, partly driven
by higher production volumes of sinter in connection with the
implementation of new initiatives in the efficiency improvement
programme for 2021, and partly by a low-base effect following
capital repairs performed in 2020 at EVRAZ KGOK's sinter machine
no. 1.
-- External iron ore product sales fell by 17.4% YoY as a result
of concentrate shortage in Q1 2021, an increase in EVRAZ NTMK's
demand for pig iron in 2021.
-- Sales of vanadium products rose by 5.7% YoY due to overall
stronger demand in 2021, caused by the recovery of key steel
consuming sectors globally.
Product, '000 tonnes Q4 Q3 Q4 2021/ Q3 2021, change 12m 12m 12m 2021/ 12m 2020, change
2021 2021 2021 2020
------------------------- ------- ------- ------------------------- ------- -------- ---------------------------
Total crude steel
production 3,384 3,403 -0.6% 13,569 13,630 -0.4%
Russia 2,904 2,912 -0.3% 11,690 12,050 -3.0%
North America 480 491 -2.2% 1,879 1,580 18.9%
Total raw coking coal
mined 6,699 4,983 34.4% 23,272 20,653 12.7%
Total coking coal
concentrate
production 4,166 3,746 11.2% 15,962 15,528 2.8%
Iron ore products
production 3,751 3,504 7.0% 14,399 14,205 1.4%
Total sales of steel
products(1) 3,188 2,979 7.0% 12,469 13,062 -4.5%
Semi-finished products 1,357 1,338 1.4% 5,541 6,183 -10.4%
Finished products 1.831 1,641 11.6% 6,928 6,879 0.7%
Total sales of
third-party steel
products 210 213 -1.4% 774 848 -8.7%
Sales of coking coal
products 2,561 2,462 4.0% 10,608 12,336 -14.0%
Sales of iron ore
products 479 303 58.1% 1,430 1,732 -17.4%
Sales of vanadium in
slag 2,460 1,834 34.1% 7,053 6,129 15.1%
Sales of vanadium final
products(2) 3,809 2,864 33.0% 13,288 12,567* 5.7%
------------------------- ------- ------- ------------------------- ------- -------- ---------------------------
Note. Numbers in this table and the tables below may not add up
to totals due to rounding.
(1) Includes tonnes of pig iron
(2) In tonnes of pure vanadium
* The 2020 data has been adjusted
STEEL SEGMENT
Total production volumes
Q4 2021/ Q3 2021, 12m 2021/ 12m 2020,
Product, '000 tonnes Q4 2021 Q3 2021 change 12m 2021 12m 2020 change
------------------------ -------- -------- ------------------------ --------- --------- ------------------------
Pig iron production 2,701 2,716 -0.6% 10,819 11,157 -3.0%
EVRAZ ZSMK 1,429 1,445 -1.1% 5,733 6,208 -7.7%
EVRAZ NTMK 1,272 1,271 0.1% 5,086 4,949 2.8%
Crude steel production 2,904 2,912 -0.3% 11,690 12,050 -3.0%
EVRAZ ZSMK 1,817 1,824 -0.4% 7,272 7,671 -5.2%
EVRAZ NTMK 1,087 1,088 -0.1% 4,418 4,379 0.9%
Total steel products
production, net of
re--rolled volume 2,693 2,721 -1.0% 10,763 11,082 -2.9%
EVRAZ ZSMK 1,571 1,643 -4.4% 6,321 6,766 -6.6%
EVRAZ NTMK 1,010 985 2.5% 4,049 3,999 1.3%
EVRAZ Caspian Steel 112 93 20.4% 393 317 24.0%
Iron ore products
production 3,751 3,504 7.0% 14,399 14,205 1.4%
Pellets (EVRAZ KGOK) 1,704 1,563 9.0% 6,484 6,548 -1.0%
Sinter (EVRAZ KGOK) 943 946 -0.3% 3,732 3,582 4.2%
Concentrate saleable
(EVRAZ KGOK, EVRAZ
ZSMK) 1,104 995 11.0% 4,183 4,075 2.7%
Coking coal concentrate
production 347 366 -5.2% 1,514 1,930 -21.6%
From own raw coal(1) 287 305 -5.9% 1,275 1,518 -16.0%
From third-party raw
coal 60 61 -1.6% 239 412 -42.0%
Gross vanadium slag
production(2) 4,856 5,198 -6.6% 20,058 19,533 2.7%
------------------------ -------- -------- ------------------------ --------- --------- ------------------------
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 Q4 2021, pig iron production at the Group's Russian mills
remained mostly flat QoQ. In FY2021, pig iron production dropped by
3.0% YoY because of a shortage of sinter and coke, as well as
because of the export duty introduction (effective until the end of
2021) which led to lower margins from production at EVRAZ ZSMK.
Crude steel production volumes remained mostly flat QoQ and fell
by 3.0% YoY amid lower pig iron production at EVRAZ ZSMK.
Total output of steel products decreased by 1.0% QoQ. While
semi-finished product volumes were lower at EVRAZ ZSMK,
construction product volumes were higher at EVRAZ NTMK and EVRAZ
Caspian Steel amid increased market demand. In FY2021, total output
of steel products fell by 2.9% YoY, mainly because of unfavourable
prices for semi-finished products and reduced railway product
volumes at EVRAZ ZSMK amid lower demand from Russian Railways.
Output of iron ore products climbed by 7.0% QoQ. This was driven
by higher production volumes of pellets at EVRAZ KGOK following
capital repairs at roasting furnace no. 4 in September and greater
production volumes of saleable concentrate at EVRAZ ZSMK following
capital repairs at the Abagurskaya processing plant in Q3 2021 . In
FY2021, output of iron ore products rose by 1.4% YoY. This was
partly because of higher production volumes of sinter in connection
with the implementation of new initiatives in the efficiency
improvement programme for 2021, and partly because of a low-base
effect following capital repairs performed in 2020 at EVRAZ KGOK's
sinter machine no. 1. Another factor was an increase in production
volumes of concentrate saleable at EVRAZ ZSMK amid higher incoming
stocks of primary concentrate in 2021.
Output of vanadium slag fell by 6.6% QoQ, mostly driven by lower
vanadium content in pig iron and reduced pig iron duplex processing
volumes. In FY2021, output of vanadium slag rose by 2.7% YoY,
mainly because of higher pig iron duplex processing volumes during
the year.
Total sales volumes
Product, '000 tonnes Q4 2021 Q3 Q4 2021/ Q3 2021, change 12m 12m 12m 2021/ 12m 2020, change
2021 2021 2020
------------------------ -------- ------- ------------------------- ------- -------- ---------------------------
Coke 60 78 -23.3% 284 390 -27.2%
Steel products,
external sales 2,758 2,559 7.8% 10,823 11,377 -4.9%
Semi-finished products 1,357 1,338 1.4% 5,541 6,039 -8.2%
Slabs 790 709 11.4% 3,036 2,592 17.1%
Billets 425 533 -20.3% 2,050 2,933 -30.1%
Other steel
products(1) 142 96 47.9% 455 514 -11.5%
Finished products 1,401 1,221 14.7% 5,282 5,338 -1.0%
Construction products 922 799 15.4% 3,458 3,392 1.9%
Railway products 378 250 51.2% 1,193 1,299 -8.2%
Other steel products 101 172 -41.3% 631 647 -2.5%
Steel products,
inter-segment sales 7 7 0.0% 29 67 -56.7%
Third-party steel
products, external
sales 210 213 -1.4% 774 848 -8.7%
Iron ore products,
external sales 479 303 58.1% 1,430 1,732 -17.4%
Pellets 479 303 58.1% 1,430 1,732 -17.4%
Sales of vanadium in
slag 2,460 1,834 34.1% 7,053 6,129 15.1%
Sales of vanadium final
products(2) 3,809 2,864 33.0% 13,288 12,567* 5.7%
------------------------ -------- ------- ------------------------- ------- -------- ---------------------------
Note. Numbers in this table and the tables below may not add to
totals due to rounding .
(1) Includes tonnes of pig iron
(2) In tonnes of pure vanadium
* The 2020 data has been adjusted
In Q4 2021, external sales of steel products rose by 7.8% QoQ.
In FY2021, they dropped by 4.9% YoY. Sales of semi-finished
products increased by 1.4% QoQ amid the push to utilise stockpiled
material before the year-end. In FY2021, semi-finished product
sales volumes fell by 8.2% YoY because of a reduction in the output
of semi-finished products following the introduction of the export
duty in 2021.
Sales of finished products rose by 14.7% QoQ. This was driven by
higher construction product sales amid healthy market demand in Q4
2021, as well as by greater railway product sales following the
completion of capital repairs at EVRAZ ZSMK's rail and beam shop
and EVRAZ NTMK's wheel shop in Q3 2021. In FY2021, sales volumes of
finished products edged down by 1.0% YoY because of reduced demand
from Russian Railways for EVRAZ ZSMK's rails.
External s ales of iron ore products jumped by 58.1% QoQ
following the start of sales to China through the port of Ust-Luga.
In FY2021, iron ore sales volumes dropped by 17.4% YoY amid a
shortage of concentrate in Q1 2021, an increase in EVRAZ NTMK's
demand for pig iron in 2021.
Sales of vanadium products surged by 33.0% QoQ, primarily due to
higher demand in Europe and North America after a traditionally low
market activity in Q3 during the summer months. In FY2021, sales of
final vanadium products increased by 5.7% YoY due to overall
stronger demand in 2021, caused by the recovery of key steel
consuming sectors globally.
Slab and iron ore products cash cost
Cash cost, US$/t Q4 Q3 Q4 2021 / Q3 2021, change 12m 12m 12m 2021 / 12m 2020, change
2021 2021 2021 2020
------------------------- ------ ------ -------------------------- ------- ------- ----------------------------
Slab cash cost
(vertically integrated) 358 309 15.9% 308 213 44.6%
Iron ore products (Fe
62%) 47 40 17.5% 42 36 16.7%
------------------------- ------ ------ -------------------------- ------- ------- ----------------------------
Average selling prices
US$/tonne (ex-works) Q4 Q3 12m 12m
2021 2021 2021 2020
-------------------------------------------------------------------------------------- ------ ------ ------ ------
Coke 488 380 357 155
Steel products 726 761 696 442
Semi-finished products(1) 605 691 598 333
Construction products 834 827 782 479
Railway products 917 900 877 818
Other steel products 760 862 756 498
Pellets 81 154 129 60
Metal Bulletin Ferro-Vanadium basis 78% min, free DDP, consumer plant, 1st grade
Western Europe(2) 32.32 38.22 34.35 25.02
Ryan's Notes N.A. FeV 80% min, US ex-warehouse, duty paid(2) 33.39 37.66 34.77 23.85
-------------------------------------------------------------------------------------- ------ ------ ------ ------
(1) Includes prices for pig iron
(2) US$/kgV
In Q1 2022, pig iron production volumes are expected to increase
QoQ because of a low-base effect as EVRAZ ZSMK's pig iron output
recovers.
Iron ore product output is expected to decrease slightly QoQ in
Q1 2022, because there are fewer working days in February.
STEEL, NORTH AMERICA SEGMENT
Production and sales volumes
Product, '000 tonnes Q4 Q3 2021 Q4 2021/ 12m 2021 12m 12m 2021/ 12m 2020, change
2021 Q3 2021, change 2020
--------------------------------- ------ -------- ----------------- --------- ------ ---------------------------
Crude steel 480 491 -2.2% 1,879 1,580 18.9%
EVRAZ US mills 221 223 -1.1% 831 838 -0.8%
EVRAZ Canadian mills (1) 260 268 -3.2% 1,048 742 41.2%
Total steel products production,
net of re-rolled volume (1) 440 430 2.3% 1,655 1,669 -0.8%
EVRAZ US mills (1) 301 278 8.4% 1,128 1,104 2.2%
EVRAZ Canadian mills (1) 139 153 -8.8% 527 565 -6.7%
Sales of steel products (1) 430 420 2.3% 1,646 1,686 -2.4%
Semi-finished products 0 0 n/a 0 144 -100.0%
Construction products 57 63 -9.5% 268 262 2.3%
Railway products 103 90 14.4% 383 404 -5.2%
Flat-rolled products 142 172 -17.2% 625 382 63.6%
Tubular products (1) 128 96 33.7% 370 493 -24.9%
--------------------------------- ------ -------- ----------------- --------- ------ ---------------------------
(1) Forecast 2020 updated in accordance with the actual data
In Q4 2021, crude steel production was 2.2% lower QoQ, mainly
because of a maintenance outages in November. In FY2021, crude
steel production climbed by 18.9% YoY, primarily because of high
market demand for flat-rolled products.
Semi-finished product sales fell by 100.0% YoY following the
fulfilment of a contract with the key customer in 2020.
Sales of construction products dropped by 9.5% QoQ as a result
of logistical challenges at the end of the year amid the new wave
of the pandemic in the US. In FY2021, construction product sales
rose by 2.3% YoY amid strong market demand and because product
price growth outpaced that of raw materials.
Sales of railway products increased by 14.4% QoQ, mostly as a
result of a low-base effect following a non-repeat outage in Q3. In
FY2021, sales of railway products decreased by 5.2% YoY, primarily
due to the unplanned steelmaking downtime earlier in the year and
softer customer demand H1 2021.
In Q4 2021, flat-rolled product sales fell by 17.2% QoQ. This
was mainly due to seasonal decline as the customers focused on
managing their inventory at the end of the year. In FY2021, sales
of flat-rolled products were up by 63.6% YoY due to a spike in
demand in 2021 following quick market recovery from the COVID-19
pandemic and limited available supply.
In Q4 2021, t ubular product sales surged by 33.7% QoQ, mainly
due to continuing improvement of the OCTG market demand. In FY2021,
tubular products sales were 24.9% lower YoY mainly due to
completion of 2020 customer orders earlier in the year.
Average selling prices
US$/tonne (ex-works) Q4 Q3 12m 12m
2021 2021 2021 2020
--------------------------- ------ ------ ------ ------
Construction products (1) 1,146 1,015 961 665
Flat-rolled products(1) 1,782 1,470 1,319 755
Tubular products(2) 1,724 1,619 1,610 1,334
--------------------------- ------ ------ ------ ------
(1) Forecast 2020 updated in accordance with the actual data
(2) Forecast 2020 and Q3 2021 updated in accordance with the
actual data
In Q1 2022, steel production and sales volumes are forecasted to
be relatively flat QoQ as market sentiments are expected to remain
stable in the product segments served by EVRAZ.
COAL SEGMENT
Production volumes
Product, '000 tonnes Q4 Q3 Q4 2021/ Q3 2021, change 12m 2021 12m 12m 2021/ 12m 2020, change
2021 2021 2020
-------------------------- ------ ------ ------------------------- --------- ------- ---------------------------
Raw coking coal (mined) 6,699 4,983 34.4% 23,272 20,653 12.7%
Coking coal concentrate
(production) 3,819 3,380 13.0% 14,448 13,598 6.3%
-------------------------- ------ ------ ------------------------- --------- ------- ---------------------------
In Q4 2021, overall raw coking coal output surged by 34.4% QoQ,
mainly because of the completion of longwall moves at the
Raspadskaya, Osinnikovskaya and Yerunakovskaya-VIII mines. In
FY2021, production of raw coking coal climbed by 12.7% YoY. The
main driver of the increase was the resumption of work at Razrez
Raspadsky, which had halted operations from May to September 2020
amid poor market conditions. Another contributor was the transfer
of operations at Esaulskaya to the new longwall no. 29.
Output of coking coal concentrate rose by 13.0% QoQ and 6.3% YoY
following an increase in coal mining volumes.
Sales volumes
Product, '000 tonnes Q4 Q3 Q4 2021/ Q3 2021, change 12m 12m 12m 2021/ 12m 2020, change
2021 2021 2021 2020
--------------------------- ------ ------ ------------------------- ------- ------- ---------------------------
External sales 2,561 2,462 4.0% 10,608 12,336 -14.0%
Raw coking coal 145 104 40.0% 686 2,271 -69.8%
Coking coal concentrate 2,416 2,358 2.5% 9,922 10,065 -1.4%
Intersegment sales 1,443 1,533 -5.9% 6,197 6,990 -11.3%
Raw coking coal 507 522 -3.0% 2,172 2,323 -6.5%
Coking coal concentrate 936 1,010 -7.4% 4,025 4,667 -13.8%
--------------------------- ------ ------ ------------------------- ------- ------- ---------------------------
In Q4 2021, external sales volumes of coking coal products
climbed by 4.0% QoQ. In FY2021, they fell by 14.0% YoY. Raw coking
coal sales volumes jumped by 40.0% QoQ in connection with raw
coking coal output growth. In FY2021, external sales volumes of
coking coal products decreased by 69.8% YoY following the change in
the product mix in favour of coking coal concentrate to meet
customer needs.
Coking coal concentrate sales volumes rose by 2.5% QoQ amid an
increase in coal mining volumes and favourable market
conditions.
Coking coal concentrate cash cost
Cash cost, US$/t Q4 Q3 Q4 2021 / Q3 2021, change 12m 12m 12m 2021 / 12m 2020, change
2021 2021 2021 2020
------------------------- ------ ------ -------------------------- ------ ------ ----------------------------
Coking coal concentrate 42 48 -12.5% 41 31 32.3%
------------------------- ------ ------ -------------------------- ------ ------ ----------------------------
Note: Starting from 2021, the methodology has been changed.
Average selling prices
Q4 Q3 12m 12m
US$/tonne (ex-works) 2021 2021 2021 2020
------------------------- ------ ------ ------ ------
Raw coking coal 164 97 89 34
Coking coal concentrate 204 131 122 62
------------------------- ------ ------ ------ ------
In Q1 2022, raw coal production is expected to decrease QoQ amid
longwall movements at the Raspadskaya, Uskovskaya and Alardinskaya
mines , as well as unfavourable mining and geological conditions at
the Esaulskaya 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.
For further information:
Media Relations:
Moscow: +7 495 937 6871
London: + 4 4 207 290 1096
media@evraz.com
Investor Relations:
Moscow: +7 495 232 1370
London: + 4 4 207 290 1095
ir@evraz.com
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END
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