Date of publication: 31.01.2019
31 January 2019 — EVRAZ plc (LSE: EVR; “EVRAZ” or the “Group”) today released its trading update for the fourth quarter and full year of 2018.
Q4 2018 vs Q3 2018 HIGHLIGHTS
• In Q4 2018, EVRAZ’ consolidated crude steel output was flat QoQ at 3.1 million tonnes.
• Sales volumes of semi-finished products fell by 16.0% QoQ, primarily due to production decrease in August-September amid capital repairs of blast furnace no.3 at EVRAZ ZSMK which mostly influenced the Q4 2018 sales as well as due to late shipment of products in December 2018 (transfer of title took place in January 2019 taking into account the delivery time).
• Sales of finished products edged down by 1.6%, which was mostly attributable to lower sales volumes of construction and railway products amid a seasonal reduction in market demand.
• Production of raw coking coal climbed by 15.3% QoQ to 6.9 million tonnes due to increased longwall productivity at the Raspadskaya mine, as well as from bringing mothballed equipment back online and hiring third-party contractors at Raspadsky open-pit mine and the open-pit at Raspadskaya-Koksovaya site.
• Coking coal product sales grew by 4.7% QoQ, mainly due to higher export sales amid favourable market conditions and higher shipments to deliver outstanding volumes from Q3 2018. This was partly offset by lower raw coking coal shipments during the longwall repositioning at Yuzhkuzbassugol’s mines.
• External iron ore product sales rose by 7.7% QoQ, primarily because EVRAZ ZSMK required less feedstock during the capital repairs of its blast furnace no. 3 in August-December. An additional driver was increased sales of material stockpiled while EVRAZ KGOK’s indurating machine was being repaired in Q3 2018.
• Sales of vanadium products dropped by 17.9% QoQ, mainly due to replenishing ferrovanadium stocks to serve 2019 requirements. Other factors included maintenance at EVRAZ Vanady-Tula to reline the roasting kiln refractories and replace the grinding mill during September and October.
FY 2018 vs FY 2017 HIGHLIGHTS
• In FY 2018, EVRAZ’ consolidated crude steel production decreased by 7.3% YoY to 13.0 million tonnes. This was mainly attributable to the disposal of EVRAZ DMZ in March 2018, as well as a reduction in crude steel production at EVRAZ ZSMK following the capital repairs of its blast furnace no. 3 in August-December 2018, a technical incident at EVRAZ ZSMK’s blast furnace no. 1 in August 2018 and the launch of EVRAZ NTMK’s blast furnace no. 7 in March 2018.
• Sales volumes of semi-finished products dropped by 18.0% YoY, primarily due to reduced steel product output at the Group’s Russian mills. Meanwhile, sales of finished products edged up by 3.5%, which was mostly attributable to higher output in North America in response to higher rail, rod bar and seamless pipe demand at EVRAZ Pueblo, as well as the stabilization of steelmaking operations at EVRAZ Regina.
• Production of raw coking coal rose by 3.8% YoY to 24.2 million tonnes after the Raspadskaya-Koksovaya site increased open-pit mining volumes to boost output of premium low-vol coking coal.
• External iron ore product sales fell by 32.0% YoY, primarily as a result of the disposal of EVRAZ Sukha Balka in June 2017.
• Sales of vanadium products declined by 18.8% YoY amid higher oxide availability during 2017 resulting from conversion of slag stocks at third parties, production downtime in 2018 due to launch of blast furnace no. 7 at EVRAZ NTMK and maintenance at EVRAZ Vanady-Tula, as well as no Nitrovan sales in 2018 from EVRAZ Vametco reported following its deconsolidation in May 2017.