April 13, 2017

Severstal reports Q1 2017 operational results

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 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.

SUMMARY OF KEY PRODUCTION, SALES VOLUMES AND SELLING PRICES DATA

Production, tonnes

Q1 2017

Q4 2016

Change, %

Q1 2017

Q1 2016

Change, %

Crude steel (Russian Steel)

2,863,947

2,924,374

(2%)

2,863,947

2,908,314

(2%)

Hot metal (Russian Steel)

2,341,719

2,358,181

(1%)

2,341,719

2,354,256

(1%)

 

 

 

 

 

 

 

Sales volumes, tonnes

Q1 2017

Q4 2016

Change, %

Q1 2017

Q1 2016

Change, %

Coking coal concentrate

710,622

800,462

(11%)

710,622

1,360,081

(48%)

Iron ore pellets

2,579,417

2,792,900

(8%)

2,579,417

2,407,186

7%

Iron ore concentrate

802,939

922,169

(13%)

802,939

937,772

(14%)

Total steel products (Consolidated)

2,530,181

2,782,004

(9%)

2,530,181

2,448,043

3%

Total steel products (Russian Steel)

2,540,351

2,793,364

(9%)

2,540,351

2,461,741

3%

 

High value added steel products, %

Q1 2017

Q4 2016

Change, %

Q1 2017

Q1 2016

Change, %

Severstal (Consolidated)

44%

40%

4 ppts

44%

42%

2 ppts

Severstal Russian Steel

44%

40%

4 ppts

44%

42%

2 ppts

 

 

 

SEVERSTAL’S CONSOLIDATED SALES (NET OF INTERCOMPANY SALES)

Sales volumes, tonnes

Q1 2017

Q4 2016

Change, %

Q1 2017

Q1 2016

Change, %

Coal:

473,233

556,228

(15%)

473,233

1,180,594

(60%)

Coking coal concentrate

7,677

80,684

(90%)

7,677

462,770

(98%)

Steam coal

465,556

475,544

(2%)

465,556

717,824

(35%)

Iron ore:

1,341,387

1,545,101

(13%)

1,341,387

1,154,261

16%

Iron ore pellets

1,341,387

1,545,101

(13%)

1,341,387

1,154,261

16%

Semi-finished products

117,042

260,979

(55%)

117,042

131,402

(11%)

Rolled products:

2,006,200

2,084,938

(4%)

2,006,200

1,848,992

9%

Hot-rolled coil

984,077

1,055,917

(7%)

984,077

966,480

2%

Hot-rolled plate

193,298

189,772

2%

193,298

163,548

18%

Cold-rolled coil

320,186

281,572

14%

320,186

203,972

57%

Galvanised and metallic coated coil

117,517

122,532

(4%)

117,517

117,941

0%

Colour coated coil

84,404

79,592

6%

84,404

82,362

2%

Long products

306,718

355,553

(14%)

306,718

314,689

(3%)

Downstream products:

406,939

436,087

(7%)

406,939

467,649

(13%)

Metalware products

144,429

150,479

(4%)

144,429

147,338

(2%)

Large diameter pipes

68,367

63,280

8%

68,367

113,165

(40%)

Other tubes, pipes, formed shapes

194,143

222,328

(13%)

194,143

207,146

(6%)

 

Full version of the press release

 

Contacts

Investor Relations

Evgeny Belov

T: +7 (495) 926-77-66 ext. 6445

evgenii.belov@severstal.com

Vladimir Zaluzhsky

T: +7 (495) 926-77-66 ext. 6375

vladimir.zaluzhsky@severstal.com

 

Public Relations

Anastasia Mishanina

T: +7 (495) 926-77-66 ext. 6457

anastasia.mishanina@severstal.com

 

Severstal’s financial communications agent - Hudson Sandler

Andrew Hayes / Elena Garside / Alex Brennan

T: +44 (0) 20 7796 4133