Severstal reports Q1 2015 operational results

Moscow, Russia – April 14, 2015 – 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 2015.

Q1 2015 GROUP HIGHLIGHTS

● Crude steel production increased 2% q/q to 2.96 mln tonnes (Q4 2014: 2.89 mln tonnes) with the prior quarter impacted by scheduled maintenance at one of the BOFs. Lower hot metal production (down 1% q/q to 2.31 mln tonnes) reflects short-term maintenance at BF#5.

● Steel assets continued to run at near to full capacity, with the Balakovo mini-mill further ramping-up production.

● Consolidated sales of steel products declined 4% q/q as the Company built its internal stock of high value-added (HVA) products to normal levels after divesting inventories against strong demand in Q4 2014.

● There has been an increase in profitability for hot-rolled coil (HRC) export deliveries almost throughout the entire quarter on the back of RUB devaluation, which resulted in higher HRC sales volumes.

● The abovementioned factors resulted in a 6 ppts decrease of the share of HVA products in the sales portfolio, to 46% (Q4 2014: 52%).

● Coking coal concentrate sales volumes at Vorkutaugol decreased 13% q/q to 1.27 mln tonnes (Q4 2014: 1.47 mln tonnes) due to seasonal severe weather conditions in the region.

● Whilst the pricing environment remains challenging, the sharp RUB devaluation triggered a round of RUB-nominated price increases in Q1 2015 in order to catch up with export USD-nominated parity. This has partially mitigated the impacts of both the RUB devaluation and the global steel prices decline.