October 9, 2020

Severstal reports Q3 & 9M 2020 operational results

PAO Severstal (MOEX: CHMF; LSE: SVST), one of the world’s leading vertically integrated steel and steel-related mining companies, today announces its operational results for Q3 & 9M 2020.

Q3 2020 GROUP HIGHLIGHTS

  • Hot metal output increased 3% q/q in Q3 2020 to 2.40 mln tonnes (Q2 2020: 2.33 mln tonnes) following the completion of maintenance works at blast furnace facilities in the previous quarter. Crude steel production increased by 3% to 2.89 mln tonnes (Q2 2020: 2.81 mln tonnes), supported by growth in hot metal output.
  • Consolidated sales of steel products increased 18% q/q to 3.01 mln tonnes in Q3 2020 (Q2 2020: 2.55 mln tonnes) reflecting production growth, a lower share of export shipments with a longer realisation period vs the previous quarter and finished goods stock reduction.
  • The Company increased its share of domestic steel shipments to 63% (Q2 2020: 56%) in response to a demand recovery in Russia in Q3 2020.
  • The share of high value-added (HVA) products within the sales portfolio amounted to 49% (Q2 2020: 43%) as a result of delayed demand for HVA products, and the Company reduced HVA finished goods stock levels q/q.
  • Sales volumes of coking coal concentrate from Vorkutaugol declined 5% q/q to 1.22 mln tonnes as a result of lower concentrate output and a lower run-of-mine (ROM-rate) at the Zapolyarnaya mine.
  • Sales volumes of iron ore pellets increased by 3% to 2.61 mln tonnes (Q2 2020: 2.53 mln tonnes) on the back of iron ore pellet production growth and inventory sell-off q/q.
  • Sales volumes of iron ore concentrate grew by 3% to 1.96 mln tonnes (Q2 2020: 1.90 mln tonnes), primarily driven by higher output at Karelsky Okatysh and Olcon.

9M 2020 GROUP HIGHLIGHTS

  • Hot metal output remained flat y/y in 9M 2020 at 7.14 mln tonnes (9M 2019: 7.13 mln tonnes). Production of crude steel decreased to 8.55 mln tonnes (9M 2019: 9.13 mln tonnes) due to lower production volumes of EAF steel following the disposal of Balakovo mini-mill in July 2019.
  • The share of HVA products remained stable y/y at 45% in 9M 2020. The share of domestic shipments in 2020 was 58%, which is lower than in 2019 (9M 2019: 67%). This is a result of a deceleration in domestic demand in 2020 after achieving peak levels in the previous year and the disposal of the Balakovo mini-mill, which primarily served domestic markets.
  • The average steel selling prices for 9M 2020 declined from 10% to 19% across the product range, as a result of adverse pricing dynamics of global benchmarks y/y.
  • Iron ore concentrate sales volumes grew 14% y/y to 5.33 mln tonnes (9M 2019: 4.66 mln tonnes) driven by output growth at Karelsky Okatysh and the Yakovlevskiy mine y/y. The Company expects to achieve total production of around 2mt of iron ore concentrate at the Yakovlevskiy mine in FY2020.
  • Coking coal concentrate sales volumes from Vorkutaugol increased 3% y/y.

SUMMARY OF KEY PRODUCTION, SALES VOLUMES

Production, thousands of tonnes

Q3 2020

Q2 2020

Change, %

9M 2020

9M 2019

Change, %

Crude Steel (Russian Steel)

2,890

2,807

3%

8,547

9,133

(6%)

Hot metal (Russian Steel)

2,402

2,331

3%

7,143

7,125

0%

Sales volumes, thousands of tonnes

Q3 2020

Q2 2020

Change, %

9M 2020

9M 2019

Change, %

Coking coal concentrate

1,218

1,276

(5%)

3,445

3,340

3%

Iron ore pellets

2,613

2,532

3%

8,112

8,192

(1%)

Iron ore concentrate

1,960

1,904

3%

5,333

4,660

14%

Total steel products (Consolidated)

3,006

2,551

18%

8,306

8,503

(2%)

Total steel products (Russian Steel)

3,020

2,561

18%

8,340

8,538

(2%)

High value added steel products, %

Q3 2020

Q2 2020

Change, %

9M 2020

9M 2019

Change, %

Severstal (Consolidated)

49%

43%

6 ppts

45%

45%

(0 ppts)

Severstal Russian Steel

49%

43%

6 ppts

45%

45%

(0 ppts)

 

SEVERSTAL’S CONSOLIDATED SALES (NET OF INTERCOMPANY SALES)

Sales volumes, thousands of tonnes

Q3 2020

Q2 2020

Change, %

9M 2020

9M 2019

Change, %

Coal:

344

370

(7%)

1,101

1,250

(12%)

Coking coal concentrate

46

104

(56%)

215

331

(35%)

Steam coal

298

266

12%

886

919

(4%)

Iron ore:

1,358

1,511

(10%)

4,530

4,785

(5%)

Iron ore pellets

1,355

1,461

(7%)

4,343

4,170

4%

Iron ore concentrate

3

50

(94%)

187

615

(70%)

Semi-finished products

97

100

(3%)

389

279

39%

Rolled products:

2,383

2,084

14%

6,637

6,916

(4%)

Hot - rolled coil

1,267

1,179

7%

3,643

3,310

10%

Hot - rolled plate

244

219

11%

715

702

2%

Cold - rolled coil

253

198

28%

661

743

(11%)

Galvanised and metallic coated coil

286

196

46%

701

729

(4%)

Colour coated coil

162

113

43%

373

365

2%

Long products

171

179

(4%)

544

1,067

(49%)

Downstream products:

526

367

43%

1,280

1,308

(2%)

Metalware products

145

135

7%

426

413

3%

Large diameter pipes

85

25

n/a

129

303

(57%)

Other tubes, pipes, formed shapes

296

207

43%

725

592

22%

 

SALES PRICE, SEVERSTAL RUSSIAN STEEL (‘RSD’)

Sales price, $/tonne

Q3 2020

Q2 2020

Change, %

9M 2020

9M 2019

Change, %

Semi-finished products

376

388

(3%)

385

427

(10%)

Hot - rolled coil

416

417

0%

423

506

(16%)

Hot-rolled plate

517

545

(5%)

558

660

(15%)

Cold - rolled coil

504

528

(5%)

536

621

(14%)

Galvanised and metallic coated coil

639

643

(1%)

638

724

(12%)

Colour coated coil

797

790

1%

789

894

(12%)

Long products

411

417

(1%)

419

476

(12%)

Metalware products

832

837

(1%)

852

965

(12%)

Large diameter pipes

825

778

6%

811

996

(19%)

Other tubes, pipes, formed shapes

480

477

1%

492

578

(15%)

Sales price, $/tonne

Q3 2020

Q2 2020

Change, %

9M 2020

9M 2019

Change, %

Weighted average steel selling price

510

500

2%

510

602

(15%)

 

NOTES:

  1. Sales prices are stated on EXW basis;
  2. Segmental data includes intercompany sales;
  3. Semi-finished products include pig iron, slabs, billets, ingots, steel casting and forgings;
  4. Large diameter pipes include all pipes with a diameter between 820 and 1420 mm.

See full version of the press release.