TIDMEVR
RNS Number : 4465L
Evraz Plc
19 July 2017
EVRAZ Q2 2017 PRODUCTION REPORT
19 July 2017 - EVRAZ plc (LSE: EVR; "EVRAZ" or the "Group")
today released its operational results for the second quarter of
2017.
Q2 2017 vs Q1 2017 OPERATIONAL HIGHLIGHTS:
-- Consolidated crude steel output fell by 9.5%
quarter-on-quarter to 3.3 million tonnes in Q2 2017, primarily due
to planned capital repairs at EVRAZ ZSMK's oxygen steelmaking
converter no. 5 and blast furnace no. 2, as well as planned capital
repairs at EVRAZ DMZ' oxygen-converter plant.
-- Production of steel products, net of re-rolled volumes,
decreased by 8.0% quarter-on-quarter to 3.0 million tonnes as a
result of reduced output of semi-finished products amid planned
capital repairs at EVRAZ ZSMK.
-- The share of finished steel products in consolidated volumes
rose to 63.8% in Q2 2017, up from 55.6% in Q1 2017, due to lower
output of semi-finished products in Russia and Ukraine.
-- Production of construction products increased by 10.5%
quarter-on-quarter, as demand for construction products improved
with the beginning of construction season.
-- Production of railway products was down 1.9% due to changed
product mix on Russian facilities, which was partially offset by
higher output in North America (up 10.1% quarter-on-quarter) due to
marginally increased demand for rails driven by Class I railroads
finalised destocking.
-- Output of flat products rose by 8.4% quarter-on-quarter,
mostly following planned maintenance outage at EVRAZ Palini e
Bertoli in Q1 2017 as well as due to strengthening demand in North
America.
-- Consolidated raw coking coal output increased by 7.9%
following a planned longwall repositioning at the Raspadskaya mine
in Q1 2017. In addition, open-pit mining operations were started at
the site of the Raspadskaya-Koksovaya mine to produce deficit OS
(semi-hard) coking coal grade.
STEEL
Product, '000 tonnes Q2 Q1 2017 Q2 2017/ Q1 2017, change H1 H1 H1 2017/ H1 2016, change
2017 2017 2016
----------------------------- ------- -------- ------------------------- ------ ------ -------------------------
Coke (saleable) 171 118 44.9% 289 457 -36.8%
Pig iron 2,793 2,894 -3.5% 5,687 5,557 2.3%
Pig iron (saleable) 195 44 343.2% 239 188 27.1%
Crude steel 3,328 3,679 -9.5% 7,007 6,739 4.0%
Steel products, gross* 3,211 3,522 -8.8% 6,733 6,461 4.2%
Steel products, net of
re-rolled volumes 2,994 3,255 -8.0% 6,249 6,134 1.9%
Semi-finished products** 1,084 1,446 -25.0% 2,530 2,439 3.7%
Finished products 1,910 1,809 5.6% 3,719 3,695 0.6%
Construction products 970 878 10.5% 1,848 2,075 -10.9%
Railway products 410 418 -1.9% 828 751 10.3%
Flat-rolled
products*** 206 190 8.4% 396 279 41.9%
Tubular products 167 166 0.6% 333 308 8.1%
Other steel products 157 157 0.0% 314 282 11.3%
----------------------------- ------- -------- ------------------------- ------ ------ -------------------------
Note. Numbers in this table and the tables below may not add to
totals due to rounding.
* Gross volume of steel products in the tables includes those
re-rolled at other EVRAZ mills. However, such volumes are
eliminated as inter-company sales for the purposes of EVRAZ'
consolidated operating results.
** Consolidated production volumes of semi-finished products are
preliminary, as intra-group re-rolling volumes are yet to be
finalised.
*** Includes production volumes of EVRAZ Palini e Bertoli (65
thousand tonnes in Q2 2017 and 116 thousand tonnes in H1 2017),
which resumed operations in 2016 after suspending them in August
2013.
RUSSIA and KAZAKHSTAN
Product, '000 tonnes Q2 2017 Q1 2017 Q2 2017/ Q1 2017, change H1 H1 H1 2017/ H1 2016, change
2017 2016
-------------------------- -------- -------- ------------------------- ------- ------- -------------------------
Coke (saleable) 75 69 8.7% 144 191 -24.6%
Pig iron 2,537 2,663 -4.7% 5,200 5,020 3.6%
Pig iron (saleable) 90 37 143.2% 127 175 -27.4%
Crude steel 2,762 2,980 -7.3% 5,742 5,444 5.5%
Steel products, gross 2,558 2,806 -8.8% 5,364 5,104 5.1%
Steel products, net of
re-rolled volumes 2,493 2,769 -10.0% 5,262 5,009 5.1%
Semi-finished products 1,178 1,536 -23.3% 2,714 2,408 12.7%
Finished products 1,315 1,232 6.7% 2,547 2,600 -2.0%
Construction products 859 759 13.2% 1,617 1,768 -8.5%
Railway products 311 328 -5.2% 639 570 12.1%
Other steel products 145 145 0.0% 290 262 10.7%
-------------------------- -------- -------- ------------------------- ------- ------- -------------------------
In Q2 2017, production of crude steel and steel products (net of
re-rolled volumes) decreased quarter-on-quarter by 7.3% and 10.0%,
respectively, due to planned capital repairs at EVRAZ ZSMK's oxygen
steelmaking converter no. 5 in April-June and blast furnace no. 2
in June.
The decrease in steel product volumes was primarily caused by
reduced output of semi-finished products (down 23.3%
quarter-on-quarter), which was partly offset by higher output of
construction products (up 13.2% quarter-on-quarter), driven by
stronger demand for rebars and channels.
Output of railway products, including rails, was down slightly
quarter-on-quarter due to lower volumes at EVRAZ ZSMK in the view
of changed product mix. However, volumes increased half-on-half,
mainly due to higher volumes at EVRAZ ZSMK amid more favourable
demand for rails and wheels in 2017.
Average selling prices
US$/tonne (ex works) Q2 Q1 H1 H1
2017 2017 2017 2016
-------------------------- ------- ------- ------- -------
Coke 172 212 189 83
Pig iron 251 262 255 141
Steel products
Semi-finished products 352 344 347 210
Construction products 499 530 514 348
Railway products 646 621 633 442
Other steel products 501 503 502 357
-------------------------- ------- ------- ------- -------
Overall, steel selling prices in Q2 2017 followed divergent
trends according to global benchmarks.
In Q3 2017, crude steel output is expected to increase by
roughly 3% due to the completion of capital repairs at EVRAZ ZSMK's
blast furnace no. 2 in Q2 2017. Production of finished products is
expected to fall as a result of a gas pause at EVRAZ ZSMK in
August, as well as capital repairs of the rail mills at EVRAZ NTMK
in August-September and at EVRAZ ZSMK in August.
NORTH AMERICA
Product, '000 tonnes Q2 2017* Q1 2017 Q2 2017/ Q1 2017, change H1 2017 H1 H1 2017/ H1 2016, change
2016
------------------------- --------- -------- ------------------------- -------- ------ -------------------------
Crude steel 419 457 -8.3% 876 734 19.3%
Steel products, net of
re-rolled volumes 467 462 -1.1% 929 895 3.8%
Construction products 61 68 -10.3% 129 135 -4.4%
Railway products 98 89 10.1% 187 181 3.3%
Flat-rolled products 141 139 1.4% 280 271 3.3%
Tubular products 167 166 0.6% 333 308 8.1%
------------------------- --------- -------- ------------------------- -------- ------ -------------------------
* Q2 2017 production volumes are preliminary
Crude steel production decreased by 8.3% quarter-on-quarter as a
result of a planned outage at the Regina mill in order to install
upgrades to the rolling mill, which were part of the previously
announced investment projects.
Construction products output declined by 10.3%
quarter-on-quarter due to strong import pressure.
Railway products production increased by 10.1%
quarter-on-quarter, driven by marginally better demand as Class I
railroads finalised destocking.
Production of flat-rolled products increased by 1.4%
quarter-on-quarter as a result of strengthening demand.
Production of tubular products remained almost unchanged
quarter-on-quarter. Line pipe demand continued to be impacted by
uncertainty, while oil country tubular goods (OCTG) experienced a
healthy demand recovery combined with gaining share in Western
Canada.
Average selling prices
US$/tonne (ex works) Q2 Q1 H1 H1
2017 2017 2017 2016
----------------------- ------- ------- ------- -------
Construction products 635 594 614 512
Flat-rolled products 814 742 776 624
Tubular products 1,015 980 998 982
----------------------- ------- ------- ------- -------
Prices for most steel products increased in Q2 2017, reflecting
prevailing scrap and other inputs increases, reduced pressure from
imports and positive demand fundamentals.
In Q3 2017, crude steel output is expected to increase by 5-10%
quarter-on-quarter, as EVRAZ Regina's availability returns to
normal levels after the prolonged planned outage in Q2 2017.
Tubular product volumes are expected to experience a modest
quarter-on-quarter increase in volume; flat rolled products and
construction products are expected to remain essentially unchanged
from Q2 2017 levels; and railway product volumes are expected to
decrease slightly as a result of an annual maintenance outage in
the rail mill during September and of a customary seasonal slowdown
in orders expected in the third quarter.
UKRAINE
Product, '000 tonnes Q2 2017 Q1 2017 Q2 2017/ Q1 2017, H1 2017 H1 2016 H1 2017/ H1 2016, change
change
------------------------- -------- -------- ------------------------ -------- -------- -------------------------
Coke (saleable) 96 50 92.0% 146 266 -45.1%
Pig iron 257 232 10.8% 489 537 -8.9%
Pig iron (saleable) 106 7 n/a 113 14 n/a
Crude steel 147 241 -39.0% 388 560 -30.7%
Steel products 120 203 -40.9% 323 455 -29.0%
Semi-finished products 58 139 -58.3% 197 263 -25.1%
Finished products 62 63 -1.6% 125 192 -34.9%
Construction products 50 52 -3.8% 102 172 -40.7%
Other steel products 12 12 0% 24 20 20.0%
------------------------- -------- -------- ------------------------ -------- -------- -------------------------
In Q2 2017, saleable coke volumes increased by 92.0%
quarter-on-quarter in response to higher domestic demand and
increased pig iron output.
Pig iron production went up 10.8% amid increased blast furnace
productivity, with saleable pig iron increase due to reduced billet
production (which had a lower margin in the product mix).
Production of crude steel and steel products decreased by 39.0%
and 40.9% quarter-on-quarter, respectively, (they were also down
half-on-half) after cutting production of low-margin semi-finished
products in February-May and capital repairs at EVRAZ DMZ'
oxygen-converter plant and rolling mill no. 1.
Average selling prices
US$/tonne (ex works) Q2 Q1 H1 H1
2017 2017 2017 2016
-------------------------- ------- ------- ------- -------
Coke (saleable) 230 274 245 125
Pig iron 322 314 321 196
Steel products
Semi-finished products 353 335 340 254
Construction products 474 456 465 357
Other steel products 667 604 636 484
-------------------------- ------- ------- ------- -------
Overall, prices moved in line with global benchmarks. In Q2
2017, changes in saleable coke prices primarily reflected lower
coal prices.
In Q3 2017, pig iron production is expected to increase
following repairs at EVRAZ DMZ' rolling mill no. 1 and
oxygen-converter plant in Q2 2017, accompanied by expected higher
blast furnace productivity in Q3 2017. Consequently, output of
crude steel and steel products (billets) is expected to increase
quarter-on-quarter.
IRON ORE
Product, '000 tonnes Q2 Q1 Q2 2017/ Q1 2017, change H1 H1 H1 2017/ H1 2016, change
2017 2017 2017 2016
---------------------- ------- ------- ------------------------- ------- ------- -------------------------
Iron ore products* 4,536 4,984 -9.2% 9,520 9,844 -3.3%
---------------------- ------- ------- ------------------------- ------- ------- -------------------------
* Includes production of sinter, pellets and other iron ore
products
In Q2 2017, production of iron ore decreased by 9.2%
quarter-on-quarter, mainly due to lower volumes of sinter amid
capital repairs at EVRAZ ZSMK's sintering machines no. 1 and no. 2.
The reduced output of pellets was also partly caused by the
accidental outage of EVRAZ KGOK's indurating machine no. 2 in
June.
Average selling prices
US$/tonne (ex works) Q2 Q1 H1 H1
2017 2017 2017 2016
---------------------- ------ ------ ------ ------
Pellets (Russia) 66 84 74 36
---------------------- ------ ------ ------ ------
Prices for pellet moved in line with global benchmarks.
In Q3 2017, sinter output is expected to decrease by roughly
2.5% quarter-on-quarter, mainly due to capital repairs of sintering
machine no. 2 at EVRAZ KGOK in September. Following the accidental
outage of EVRAZ KGOK's indurating machine no. 2 in Q2 2017, output
of pellets should increase by roughly 5% quarter-on-quarter in Q3
2017.
COAL
Product, '000 tonnes Q2 Q1 Q2 2017/ H1 H1 H1 2017/
2017 2017 Q1 2017, H1 2016,
change change
2017 2016
------------------------------ ------ ------ ---------- ------- ------- ----------
Raw coking coal (mined) 6,048 5,603 7.9% 11,651 11,016 5.8%
Yuzhkuzbassugol 2,761 2,502 10.4% 5,263 5,928 -11.2%
Raspadskaya 3,071 2,886 6.4% 5,957 4,883 22.0%
Mezhegeyugol 216 215 0.5% 431 206 109.6%
Coking coal concentrate
(production) 3,612 3,605 0.2% 7,217 7,297 -1.1%
Yuzhkuzbassugol's coal
washing plants 1,491 1,491 0.0% 2,982 3,321 -10.2%
Raspadskaya's coal washing
plant 1,615 1,634 -1.2% 3,249 3,120 4.1%
EVRAZ ZSMK's coal washing
plant 506 480 5.4% 986 857 15.1%
------------------------------ ------ ------ ---------- ------- ------- ----------
Production of raw coking coal increased by 7.9% following the
planned longwall repositioning in Q1 2017 at the Raspadskaya mine,
accompanied by stable work at the Raspadskaya mine's three
longwalls.
In addition, open-pit mining operations were started at the site
of the Raspadskaya-Koksovaya mine to produce deficit OS (semi-hard)
coking coal grade.
Output of coking coal concentrate remained almost unchanged
quarter-on-quarter due to higher production at EVRAZ ZSMK's coal
washing plant.
Average selling prices
Q2 Q1 H1 H1
US$/tonne (ex works) 2017 2017 2017 2016
------------------------- ------- ------- ------- -------
Raw coking coal 52 86 69 32
Coking coal concentrate 103 155 129 56
------------------------- ------- ------- ------- -------
In Q2 2017, coal prices were down in line with global
benchmarks.
In Q3 2017, raw coal production is expected to increase slightly
following the longwall repositioning at the Erunakovskaya-8 mine in
Q2 2017. This will be partially offset by the scheduled longwall
repositioning at the Raspadskaya mine in Q3 2017.
VANADIUM
Product, tonnes of V* Q2 Q1 Q2 2017/ H1 2017 H1 2016 H1 2017/
2017 2017 Q1 2017, H1 2016,
change change
--------------------------------- ------ ------ ---------- -------- -------- ----------
Vanadium slag, gross production
(Russia) 4,795 4,553 5.3% 9,348 8,267 13.1%
Vanadium in final products
(saleable) 2,641 3,291 -19.8% 5,932 6,606 -10.2%
--------------------------------- ------ ------ ---------- -------- -------- ----------
(*) Calculated in pure vanadium equivalent
In Q2 2017, output of saleable vanadium products decreased by
19.8% quarter-on-quarter, primarily due to the discontinuation of
Nitrovan production as a result of Vametco's divestment in
April.
Average FeV indices
US$/kgV Q2 Q1 H1 H1
2017 2017 2017 2016
---------------------------------------------------------------------------------- ------- ------- ------- -------
Metal Bulletin Ferro-Vanadium basis 78% min, free DDP, consumer plant, 1st grade
Western Europe 27.01 25.31 26.14 16.52
Ryan's Notes N.A. FeV 80% min, US ex-warehouse, duty paid 27.10 27.24 27.18 18.38
---------------------------------------------------------------------------------- ------- ------- ------- -------
Sale prices for vanadium products followed market trends.
In Q2 2017, the Metall Bulletin FeV80 index averaged
US$27.01/kgV, up 7% from US$25.31/kgV in Q1 2017. Meanwhile, the
Ryan's Notes index, used in North America, averaged US$27.10/kgV in
Q2 2017, down 1% from US$27.24/kgV in the previous quarter.
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. They also include railway products for
Ukraine.
###
For further information:
Media Relations:
London: +44 207 832 8998 Moscow: +7 495 937 6871
media@evraz.com
Investor Relations:
London: +44 207 832 8990 Moscow: +7 495 232 1370
ir@evraz.com
EVRAZ is a vertically integrated steel, mining and vanadium
business with operations in the Russian Federation, Ukraine,
Kazakhstan, USA, Canada, Czech Republic and Italy. EVRAZ is among
the top steel producers in the world based on crude steel
production of 13.5 million tonnes in 2016. A significant portion of
the company's internal consumption of iron ore and coking coal is
covered by its mining operations. The company's consolidated
revenues for the year ended 31 December 2016 were US$7,713 million,
and consolidated EBITDA amounted to US$1,542 million.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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