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EVRAZ Q1 2018 trading update

EVRAZ plc (LSE: EVR; “EVRAZ” or the “Group”) today released its trading update for the first quarter of 2018.

Q1 2018 vs Q4 2017 HIGHLIGHTS:

  • In Q1 2018, EVRAZ’ consolidated crude steel output fell by 5.5% QoQ to 3.3 million tonnes, primarily as a result of lower pig iron production due to iron ore supply logistics limitation in the view of severe weather conditions in January and February (congelation of third party iron ore concentrate and pellets) as well as the technical condition of blast furnaces no. 1 and no. 3 at EVRAZ ZSMK, shutdown of the blast furnace no.6 at EVRAZ NTMK and the disposal of EVRAZ DMZ in March 2018.
  • Production of raw coking coal climbed by 6.7% QoQ to 6.0 million tonnes following the completion of scheduled longwall repositioning at the Alardinskaya and Uskovskaya mines.
  • Total steel product sales dropped by 5.7% QoQ due to lower crude steel production. Sales of semi-finished products fell by 16.6%, primarily due to reduced pig iron and crude steel production. This was partly offset by a 5.7% increase in the output of finished products (mainly construction products, driven by stronger demand for rebars and channels).
  • Coking coal product sales declined by 10.0% QoQ, mainly due to unusually high sales of raw coking coal in Q4 2017, which was driven by higher sales prices and the need to reduce coking coal inventories. Coking coal concentrate sales volumes grew by 9.8% QoQ due to higher sales prices for coal concentrate and increased export sales following the debottlenecking of logistics capacity.
  • Iron ore product sales decreased by 4.3% QoQ due to restocking of pellets, which has been made driven by expected higher marginal sales to domestic market and scheduled repairs in September.
  • Sales of vanadium products fell by 17.0% QoQ, mainly due to lower FeV and oxide sales, resulting from reduced oxide availability. The main reason for lower oxide availability was reduced slag conversion at third parties resulting from slag produced in 2017. Despite the fact of expected total lower slag production during 2018 comparing to 2017, the aim is to increase conversion of the slag produced in 2018 and accumulated from 2017 later in the year.