TIDMEVR
RNS Number : 8292G
Evraz Plc
29 July 2021
EVRAZ Q2 2021 TRADING UPDATE
29 July 2021 - EVRAZ plc (LSE: EVR; "EVRAZ" or the "Group")
today released its trading update for the second quarter of
2021.
Q2 2021 vs Q1 2021 HIGHLIGHTS
-- In Q2 2021, EVRAZ' consolidated crude steel output remained almost flat QoQ.
-- Total sales of steel products climbed by 6.1% QoQ, driven
primarily by higher sales of finished products in Russia amid
favourable market conditions and an increase in slab sales
following the completion of repairs of basic oxygen furnaces at
EVRAZ NTMK in Q1 2021.
-- Total raw coking coal production dropped by 21.5% QoQ. The
reduction was caused primarily by scheduled longwall movements at
the Raspadskaya and Alardinskaya mines, as well as completion on
the current longwall at the Osinnikovskaya mine ahead of the
upcoming movement in Q3 2021.
-- External sales volumes of coking coal concentrate fell by
8.3% QoQ because of logistical restrictions on shipments to the
Russian Far East amid rising exports and the start of the repair
season at Russian Railways.
-- External sales of iron ore products increased by 8.4% QoQ,
driven by higher production in Q2 2021.
-- Sales of vanadium products fell by 3.6% QoQ, mainly due to
changing the regional sales and product mix to support the
increased FeV demand, resulting in longer lead times.
Product, '000 tonnes Q2 Q1 Q2 2021/ Q1 2021, change H1 H1 H1 2021/ H1 2020, change
2021 2021 2021 2020
---------------------------- ------- ------- ------------------------- ------- ------- -------------------------
Total crude steel
production 3,368 3,414 -1.3% 6,782 6,936 -2.2%
Russia 2,953 2,921 1.1% 5 874 6,113 -3.9%
North America 415 493 -15.8% 908 823 10.3%
Total raw coking coal mined 5,098 6,492 -21.5% 11,590 9,857 17.6%
Total coking coal
concentrate
production 3,814 4,236 -10.0% 8,050 7,567 6.4%
Iron ore products
production 3,750 3,394 10.5% 7,144 7,055 1.3%
Total sales of steel
products(1) 3,244 3,057 6.1% 6,301 6,606 -4.6%
Semi-finished products 1,439 1,406 2.3% 2,845 3,167 -10.2%
Finished products 1,805 1,651 9.3% 3,456 3,439 0.5%
Total sales of third-party
steel products 217 134 61.9% 351 372 -5.6%
Sales of coking coal
products 2,761 2,824 -2.2% 5,585 6,079 -8.1%
Sales of iron ore products 337 311 8.4% 648 801 -19.1%
Sales of vanadium in slag 1,624 1,135 43.1% 2,759 2,760 0.0%
Sales of vanadium final
products(2) 3,247 3,368 -3.6% 6,615 5,610 17.9%
---------------------------- ------- ------- ------------------------- ------- ------- -------------------------
Note. Numbers in this table and the tables below may not add up
to totals due to rounding.
(1) Includes tonnes of pig iron
(2) In tonnes of pure vanadium
FORWARD-LOOKING STATEMENTS
This document contains "forward-looking statements", which
include all statements other than statements of historical facts,
including, without limitation, any statements preceded by, followed
by or that include the words "targets", "believes", "expects",
"aims", "intends", "will", "may", "anticipates", "would", "could"
or similar expressions or the negative thereof. Such
forward-looking statements involve known and unknown risks,
uncertainties and other important factors beyond the Group's
control that could cause the actual results, performance or
achievements of the Group to be materially different from future
results, performance or achievements expressed or implied by such
forward-looking statements, including, among others, the
achievement of anticipated levels of profitability, growth, cost
and synergy of recent acquisitions, the impact of competitive
pricing, the ability to obtain necessary regulatory approvals and
licenses, the impact of developments in the Russian economic,
political and legal environment, volatility in stock markets or in
the price of the Group's shares or GDRs, financial risk management
and the impact of general business and global economic conditions.
Such forward-looking statements are based on numerous assumptions
regarding the Group's present and future business strategies and
the environment in which the Group will operate in the future. By
their nature, forward-looking statements involve risks and
uncertainties because they relate to events and depend on
circumstances that may or may not occur in the future. These
forward-looking statements speak only as at the date as of which
they are made, and each of EVRAZ and the Group expressly disclaims
any obligation or undertaking to disseminate any updates or
revisions to any forward-looking statements contained herein to
reflect any change in EVRAZ' or the Group's expectations with
regard thereto or any change in events, conditions or circumstances
on which any such statements are based. Neither the Group, nor any
of its agents, employees or advisors intends or has any duty or
obligation to supplement, amend, update or revise any of the
forward-looking statements contained in this document.
STEEL SEGMENT
Total production volumes
Product, '000 tonnes Q2 Q1 Q2 2021/ Q1 2021, change H1 H1 H1 2021/ H1 2020, change
2021 2021 2021 2020
---------------------------- ------- ------- ------------------------- ------- ------- -------------------------
Pig iron production 2,719 2,683 1.3% 5,402 5,620 -3.9%
EVRAZ ZSMK 1,435 1,424 0.8% 2,859 3,088 -7.4%
EVRAZ NTMK 1,284 1,259 2.0% 2,543 2,532 0.4%
Crude steel production 2,953 2,921 1.1% 5,874 6,113 -3.9%
EVRAZ ZSMK 1,821 1,810 0.6% 3,631 3,858 -5.9%
EVRAZ NTMK 1,132 1,111 1.9% 2,243 2,255 -0.5%
Total steel products
production, net of
re-rolled volume 2 693 2,656 1.4% 5,349 5,606 -4.6%
EVRAZ ZSMK 1,548 1,559 -0.7% 3,107 3,400 -8.6%
EVRAZ NTMK 1,040 1,014 2.6% 2,054 2,026 1.4%
EVRAZ Caspian Steel 105 83 26.5% 188 180 4.4%
Iron ore products
production 3,750 3,394 10.5% 7,144 7,055 1.3%
Pellets (EVRAZ KGOK) 1,643 1,574 4.4% 3,217 3,281 -2.0%
Sinter (EVRAZ KGOK) 922 921 0.1% 1,843 1,821 1.2%
Concentrate saleable
(EVRAZ KGOK, EVRAZ ZSMK) 1,185 899 31.8% 2,084 1,953 6.7%
Coking coal concentrate
production 434 367 18.3% 801 982 -18.4%
From own raw coal(1) 370 313 18.2% 683 830 -17.7%
From third-party raw coal 64 54 18.5% 118 152 -22.4%
Gross vanadium slag
production(2) 5,206 4,798 8.5% 10,004 10,077 -0.7%
---------------------------- ------- ------- ------------------------- ------- ------- -------------------------
Note. Numbers in this table and the tables below may not add up
to totals due to rounding.
(1) From Coal segment
(2) In tonnes of pure vanadium
In Q2 2021, pig iron and crude steel production remained mostly
flat QoQ at the Russian mills.
The total output of steel products rose by 1.4% QoQ, mainly
because of an increase of production at EVRAZ NTMK and EVRAZ
Caspian Steel amid higher market demand.
Output of iron ore products climbed by 10.5% QoQ, mainly driven
by the resumption of third-party raw material supplies and
additional loading of the Abagurskaya processing plant's capacity
at EVRAZ ZSMK.
Total sales volumes
Product, '000 tonnes Q2 Q1 Q2 2021/ Q1 2021, change H1 H1 H1 2021/ H1 2020, change
2021 2021 2021 2020
---------------------------- ------- ------- ------------------------- ------- ------- -------------------------
Coke 73 74 -2.2% 147 186 -21.0%
Steel products, external
sales 2,862 2,642 8.3% 5,504 5,628 -2.2%
Semi-finished products 1,439 1,406 2.3% 2,845 3,023 -5.9%
Slabs 870 666 30.6% 1,536 1,307 17.5%
Billets 468 624 -25.0% 1,092 1,476 -26.0%
Other steel products(1) 101 116 -12.9% 217 240 -9.6%
Finished products 1,423 1,236 15.1% 2,659 2,605 2.1%
Construction products 943 794 18.8% 1,737 1,622 7.1%
Railway products 285 279 2.2% 564 669 -15.7%
Other steel products 195 163 19.6% 358 314 14.0%
Steel products,
intersegment sales 11 4 n/a 15 43 -65.1%
Third-party steel products,
external sales 217 134 61.9% 351 372 -5.6%
Iron ore products, external
sales 337 311 8.4% 648 801 -19.1%
Pellets 337 311 8.4% 648 801 -19.1%
Sales of vanadium in slag 1,624 1,135 43.1% 2,759 2,760 0.0%
Sales of vanadium final
products(2) 3,247 3,368 -3.6% 6,615 5,610 17.9%
---------------------------- ------- ------- ------------------------- ------- ------- -------------------------
Note. Numbers in this table and the tables below may not add to
totals due to rounding.
(1) Includes tonnes of pig iron
(2) In tonnes of pure vanadium
In Q2 2021, external sales of steel products rose by 8.3% QoQ,
driven by an increase in sales volumes of semi-finished and
finished products.
Sales of semi-finished products climbed by 2.3% QoQ amid a 30.6%
QoQ surge in slab sales volumes. This was mainly driven by the
completion of repairs of basic oxygen furnace no. 1 in February and
basic oxygen furnace no. 2 in March at EVRAZ NTMK. Sales of billets
dropped by 25.0% QoQ, driven by changes in the product mix in
favour of slabs and finished products to account for market
conditions.
Sales of finished products rose by 15.1% QoQ amid favourable
market conditions. Sales of construction and other products
increased by 18.8% and 19.6% QoQ, respectively, because of higher
domestic and CIS market demand.
Sales of iron ore products climbed by 8.4% QoQ, driven by higher
production in Q2 2021.
Sales of vanadium products fell by 3.6% QoQ, mainly due to
changing the regional sales and product mix to support the
increased FeV demand, resulting in longer lead times.
Cash cost, US$/t Q2 Q1 Q2 2021/ H1 H1 H1 2021/ H1 2020, change
2021 2021 Q1 2021, change 2021 2020
--------------------------------- ------- ------- ------------------ ------- ------- -------------------------
Slab cash cost vertically
integrated 290 277 4.7% 283 210 34.8%
Iron ore products (Fe 62%) 41 40 2.5% 40 37 8.1%
--------------------------------- ------- ------- ------------------ ------- ------- -------------------------
Average selling prices
US$/t (ex-works) Q2 Q1 H1 H1
2021 2021 2021 2020
---------------------------------------------------------------------------------- ------- ------- ------- -------
Coke 307 258 285 159
Steel products 707 583 646 438
Semi-finished products(1) 604 484 543 319
Construction products 805 650 734 474
Railway products 838 838 838 873
Other steel products 740 669 704 500
Pellets 166 115 142 49
Metal Bulletin Ferro-Vanadium basis 78% min, free DDP, consumer plant, 1st grade
Western Europe(2) 35.94 30.91 33.43 25.02
Ryan's Notes N.A. FeV 80% min, US ex-warehouse, duty paid(2) 35.99 32.03 34.01 23.85
---------------------------------------------------------------------------------- ------- ------- ------- -------
(1) Includes prices for pig iron
(2) US$/kgV
In Q3 2021, pig iron production volumes are expected to slightly
decrease following the planned repairs at EVRAZ NTMK.
STEEL, NORTH AMERICA SEGMENT
Production and sales volumes
Product, '000 tonnes Q2 Q1 Q2 2021/ Q1 2021, change H1 H1 H1 2021/ H1 2020, change
2021 2021 2021 2020
---------------------------- ------- ------- ------------------------- ------- ------- -------------------------
Crude steel 415 493 -15.8% 908 823 10.3%
EVRAZ US mills 161 227 -29.1% 388 461 -15.8%
EVRAZ Canadian mills 254 266 -4.7% 520 363 43.3%
Total steel products
production, net of
re-rolled volume 385 399 -3.5% 784 914 -14.2%
EVRAZ US mills 273 276 -1.2% 549 598 -8.2%
EVRAZ Canadian mills 112 123 -8.7% 235 316 -25.6%
Sales of steel products 382 415 -8.1% 797 978 -18.5%
Semi-finished products - - - - 144 -100.0%
Construction products 82 66 24.0% 148 133 11.3%
Railway products 87 104 -16.6% 191 213 -10.3%
Flat-rolled products 143 168 -14.5% 311 169 84.0%
Tubular products 69 77 -10.1% 146 319 -54.2%
---------------------------- ------- ------- ------------------------- ------- ------- -------------------------
In Q2 2021, crude steel production at the Canadian operations
fell by 4.7% QoQ as a result of a planned seven-day maintenance
outage in May at EVRAZ Regina. Market demand remained high in the
quarter amid a rapid economic recovery from the downturn driven by
the COVID-19 pandemic, fewer imports and relatively low levels of
distributor inventory.
In Q2 2021, crude steel production of US operations decreased
29.1% QoQ due to a steam explosion in the furnace at the end of May
at EVRAZ Pueblo, resulting in an unplanned outage.
Sales of construction products in Q2 2021 climbed by 24.0% QoQ
amid strong market demand and price growth outpacing those for raw
materials.
Sales of railway products decreased by 16.6% QoQ, primarily due
to a shortage of steel caused by the unplanned steelmaking outage
in June and lower demand from project and distribution
customers.
Sales of flat-rolled products dropped by 14.5% QoQ, primarily
because of reduced steel availability driven by the planned
maintenance outage at EVRAZ Regina in May.
Tubular volumes fell by 10.1% QoQ following the completion of
large diameter pipe orders in Q1 2021, there were no large diameter
pipe shipments in Q2 2021. This decline in large diameter volumes
was partially offset by increase in OCTG and line pipe sales that
more than doubled QoQ. The improvement in sales volumes has been
driven by rapidly growing market demand, which allowed us to
restart all our OCTG facilities that had been idled since Q2
2020.
Average selling prices
US$/t (ex-works) Q2 Q1 H1 H1
2021 2021 2021 2020
----------------------- ------- ------- ------- -------
Construction products 900 826 867 665
Flat-rolled products 1,205 869 1,024 792
Tubular products 1,513 1,496 1,504 1 267
----------------------- ------- ------- ------- -------
In Q3 2021, steel production is expected to increase QoQ due to
a non-repeat planned maintenance outage at EVRAZ Regina and
unplanned downtime at EVRAZ Pueblo. We expect the market sentiment
to continue to remain strong and improve QoQ in the product
segments where EVRAZ operates.
COAL SEGMENT
Production volumes
Product, '000 tonnes* Q2 Q1 Q2 2021/ Q1 2021, change H1 H1 H1 2021/ H1 2020, change
2021 2021 2021 2020
---------------------------- ------- ------- ------------------------- ------- ------- -------------------------
Raw coking coal (mined) 5,098 6,492 -21.5% 11,590 9,857 17.6%
Coking coal concentrate
(production) 3,380 3,869 -12.6% 7,249 6,585 10.1%
---------------------------- ------- ------- ------------------------- ------- ------- -------------------------
* Starting from 2021, Raspadskaya includes Yuzhkuzbassugol and
Mezhegeyugol; the data have been adjusted
In Q2 2021, overall raw coking coal output fell by 21.5% QoQ.
The reduction was caused primarily by scheduled longwall movements
at the Raspadskaya and Alardinskaya mines, as well as completion on
the current longwall at the Osinnikovskaya mine ahead of the
upcoming movement in Q3 2021. The Group's remaining mines increased
their production volumes during the reporting period. Open-pit
mining volumes also rose at the Razrez Raspadsky and
Raspadskaya-Koksovaya sites.
Output of coking coal concentrate fell by 12.6% QoQ, mainly amid
lower mining volumes.
Sales volumes
Product, '000 tonnes Q2 Q1 Q2 2021/ Q1 2021, change H1 H1 H1 2021/ H1 2020, change
2021 2021 2021 2020
--------------------------- ------- ------- ------------------------- ------- ------- -------------------------
External sales 2,761 2,824 -2.2% 5,585 6,079 -8.1%
Raw coking coal 299 139 n/a 438 1,198 -63.4%
Coking coal concentrate 2,462 2,684 -8.3% 5,147 4,880 5.5%
Intersegment sales 1,682 1,540 9.2% 3,222 3,503 -8.0%
Raw coking coal 647 497 30.3% 1,144 1,204 -5.0%
Coking coal concentrate 1,035 1,044 -0.9% 2,078 2,300 -9.7%
--------------------------- ------- ------- ------------------------- ------- ------- -------------------------
External sales volumes of raw coking coal doubled QoQ due to
raised shipments to Ukrainian and Far East markets amid greater
demand.
External sales volumes of coking coal concentrate fell by 8.3%
QoQ because of logistical restrictions on shipments to the Russian
Far East amid rising exports and the start of the repair season at
Russian Railways. Domestic concentrate sales also fell because of
customer requests to increase raw coal supplies.
Intersegment sales volumes of coking coal products rose by 9.2%
QoQ, mainly because of an increase in the shipments of K-grade coal
from the Raspadskaya-Koksovaya mine.
Cash cost, US$/t Q2 Q1 Q2 2021/ Q1 2021, change H1 H1 H1 2021/ H1 2020, change
2021 2021 2021 2020
------------------------- ------- ------- ------------------------- ------- ------- -------------------------
Coking coal concentrate 37 34 8.8% 36 34 5.9%
------------------------- ------- ------- ------------------------- ------- ------- -------------------------
Average selling prices
Q2 Q1 H1 H1
US$/t (ex-works) 2021 2021 2021 2020
------------------------- ------- ------- ------- -------
Raw coking coal 59 46 53 36
Coking coal concentrate 86 68 76 67
------------------------- ------- ------- ------- -------
In Q3 2021, raw coal production is expected to increase QoQ,
mainly because of the completion of longwall movements at the
Alardinskaya and Raspadskaya mines, as well as work stabilisation
amid favourable mining and geological conditions at the Esaulskaya
mine.
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.
###
For further information:
Media Relations:
+7 495 937 6871
+44-207-290-1096
media@evraz.com
Investor Relations:
+7 495 232 1370
+44-207-290-1095
ir@evraz.com
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