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EVRAZ Q4 2019 AND FULL YEAR 2019 TRADING UPDATE

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EVRAZ Q4 2019 AND FULL YEAR 2019 TRADING UPDATE

EVRAZ Q4 2019 TRADING UPDATE

30 January 2020 — EVRAZ plc (LSE: EVR; “EVRAZ” or the “Group”) today released its trading update for the fourth quarter and full year of 2019.

Q4 2019 vs Q3 2019 HIGHLIGHTS

  • In Q4 2019, EVRAZ’ consolidated crude steel output rose by 2.1% QoQ, mainly due to higher production volumes at EVRAZ ZSMK after the scheduled capital repairs during July-August ended.
  • Steel product sales climbed by 6.6% QoQ, driven primarily by semi-finished products, which grew by 17.7%. This, in turn, was mainly a result of higher steel production at EVRAZ ZSMK and seasonally weaker market demand for finished construction products in Russia. In addition, sales of railway products in Russia grew by 17.8% following completion of capital repairs at EVRAZ ZSMK’s rail and beam shop in Q3 2019.
  • Total raw coking coal production decreased by 5.3% QoQ due to lower production volumes amid a scheduled longwall move at the Raspadskaya mine in Q4 2019. Coking coal concentrate production dropped by 16.7% QoQ due to softer market demand.
  • External sales volumes of coking coal products fell by 14.9% QoQ due to lower market demand.
  • External sales of iron ore products surged by 68.5% QoQ following the completion of capital repairs of EVRAZ KGOK’s roasting machines that took place during August and September.
  • Sales of vanadium final products were down by 2.0% QoQ due to lower FeV demand mainly from North American steel producers amid reduced utilisation rates.

FY2019 vs FY2018 HIGHLIGHTS

  • In 2019, EVRAZ’ consolidated crude steel production climbed by 6.1% YoY, mainly due to higher production volumes of pig iron at EVRAZ ZSMK as the blast furnace no.3 underwent a lengthier and more complex process of capital repair in 2018 (category II) vs the blast furnace no.1 in 2019 (category III).
  • Sales volumes of semi-finished products jumped by 22.8% YoY, primarily due to higher semi-finished product sales from Russia to the export markets amid greater production volumes and a sharp increase of slab sales in North America amid greater demand from customers.
  • Production of raw coking coal grew by 8.1% YoY due to higher production volumes at the Osinnikovskaya, Erunakovskaya and Uskovskaya mines, driven by improvements in capital repairs and equipment maintenance.
  • External iron ore product sales fell by 42.5% YoY, primarily as a result of higher consumption of pellets in 2019 by EVRAZ NTMK after the launch of blast furnace no. 7 in Q2 2018 and by EVRAZ ZSMK amid higher pig iron production.
Product, kt Q4 2019 Q3 2019 Q4 2019/ Q3 2019, change 12m 2019 12m 2018 12m 2019/ 12m 2018, change
Total crude steel production1 3,449 3,379 2.1% 13,814 13,019 6.1%
Russia 3,008 2,953 1.9% 11,953 10,967 9.0%
Ukraine 0 0 n/a 0 154 n/a
North America 441 426 3.5% 1,861 1,898 -1.9%
Total raw coking coal mined 5,981 6,319 -5.3% 26,140 24,188 8.1%
Total coking coal concentrate production 3,537 4,244 -16.7% 15,923 16,188 -1.6%
Iron ore products production 3,277 3,319 -1.3% 13,765 13,515 1.8%
Total sales of steel products1 3,609 3,386 6.6% 13,502 12,235 10.4%
Semi-finished products 1,699 1,443 17.7% 5,844 4,760 22.8%
Finished products 1,910 1,943 -1.7% 7,658 7,475 2.4%
Total sales of third-party steel products 200 225 -11.1% 801 900 -11.0%
Sales of coking coal products 2,514 2,953 -14.9% 11,053 11,048 0.0%
Sales of iron ore products 273 162 68.5% 1,134 1,972 -42.5%
Sales of vanadium in slag2 1,923 1,693 13.6% 6,451 6,701 -3.7%
Sales of vanadium final products3 3,514 3,585 -2.0% 12,883 12,352 4.3%

Note. Numbers in this table and the tables below may not add up to totals due to rounding.

1 The Q4 2019 production and sales volumes of EVRAZ North America are preliminary.

2 The 12m 2018 data have been adjusted.

In tonnes of pure vanadium