Severstal reports Q1 2017 operational results
Severstal reports Q1 2017 operational
Moscow, Russia - 13 April 2017 - PAO Severstal (MICEX-RTS: CHMF; LSE: SVST),
one of the world's leading vertically integrat--ed steel and steel-related
mining companies, today announces its operational results for Q1 2017.
Q1 2017 GROUP HIGHLIGHTS
- Hot metal output remained largely unchanged, decreasing only 1% to 2.34 mln
tonnes (Q4 2016: 2.36 mln tonnes) compared with the previous quarter.
- Crude steel production declined 2% to 2.86 mln tonnes (Q4 2016: 2.92 mln
tonnes). Crude steel output at CherMK was impacted by planned maintenance works
at converters #2 and #3.
- Consolidated steel product sales declined 9% q/q to 2.53 mln tonnes
compared with the previous quarter (Q4 2016: 2.78 mln tonnes). During Q1 2017,
following record sales volumes achieved in previous quarter, the Company
replenished inventories to normal levels and accumulated finished good stocks
for subsequent realisation during 2017 as well as increased export sales in
response to weaker domestic demand and lower activity from local traders.
- The proximity of key assets to the border also enabled the Company to shift
sales to export, accordingly steel product export sales volumes grew to 42% (Q4
2016: 38%) of the sales mix.
- Following the refurbishment of the four-stand cold rolling mill at CherMK
and the increase in production volumes, cold-rolled coil sales volumes
continued to increase, and were up 14% q/q, following the increase of 15% q/q
achieved in Q4 2016.
- Increased cold-rolled, large diameter pipes and colour-coated sales led to
the share of high value-added (HVA) products within the sales portfolio
increasing to 44% (Q4 2016: 40%).
- Supply disruptions in Australia boosted spot hard coking coal prices at the
beginning of April 2017, after tropical cyclone Debbie led to closures of the
main railway lines. Industry experts estimate it will take up to five weeks
before normal operations are restored. Meanwhile the seaborne HCC market is
experiencing a shortage thus boosting the spot price of coking coal. Whilst
iron ore prices were supported by significant restocking in Q1 2017 they are
now softening as port inventories have reached high levels.