PAO SEVERSTAL

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Severstal : reports Q3 & 9M 2020 operational results

10/09/2020 | 03:30am
October 9, 2020

PAO Severstal (MOEX: CHMF; LSE: SVST), one of the world's leading vertically integrated steel and steel-related mining companies, today announces its operational results for Q3 & 9M 2020.

Q3 2020 GROUP HIGHLIGHTS

  • Hot metal output increased 3% q/q in Q3 2020 to 2.40 mln tonnes (Q2 2020: 2.33 mln tonnes) following the completion of maintenance works at blast furnace facilities in the previous quarter. Crude steel production increased by 3% to 2.89 mln tonnes (Q2 2020: 2.81 mln tonnes), supported by growth in hot metal output.
  • Consolidated sales of steel products increased 18% q/q to 3.01 mln tonnes in Q3 2020 (Q2 2020: 2.55 mln tonnes) reflecting production growth, a lower share of export shipments with a longer realisation period vs the previous quarter and finished goods stock reduction.
  • The Company increased its share of domestic steel shipments to 63% (Q2 2020: 56%) in response to a demand recovery in Russia in Q3 2020.
  • The share of high value-added (HVA) products within the sales portfolio amounted to 49% (Q2 2020: 43%) as a result of delayed demand for HVA products, and the Company reduced HVA finished goods stock levels q/q.
  • Sales volumes of coking coal concentrate from Vorkutaugol declined 5% q/q to 1.22 mln tonnes as a result of lower concentrate output and a lower run-of-mine (ROM-rate) at the Zapolyarnaya mine.
  • Sales volumes of iron ore pellets increased by 3% to 2.61 mln tonnes (Q2 2020: 2.53 mln tonnes) on the back of iron ore pellet production growth and inventory sell-off q/q.
  • Sales volumes of iron ore concentrate grew by 3% to 1.96 mln tonnes (Q2 2020: 1.90 mln tonnes), primarily driven by higher output at Karelsky Okatysh and Olcon.

9M 2020 GROUP HIGHLIGHTS

  • Hot metal output remained flat y/y in 9M 2020 at 7.14 mln tonnes (9M 2019: 7.13 mln tonnes). Production of crude steel decreased to 8.55 mln tonnes (9M 2019: 9.13 mln tonnes) due to lower production volumes of EAF steel following the disposal of Balakovo mini-mill in July 2019.
  • The share of HVA products remained stable y/y at 45% in 9M 2020. The share of domestic shipments in 2020 was 58%, which is lower than in 2019 (9M 2019: 67%). This is a result of a deceleration in domestic demand in 2020 after achieving peak levels in the previous year and the disposal of the Balakovo mini-mill, which primarily served domestic markets.
  • The average steel selling prices for 9M 2020 declined from 10% to 19% across the product range, as a result of adverse pricing dynamics of global benchmarks y/y.
  • Iron ore concentrate sales volumes grew 14% y/y to 5.33 mln tonnes (9M 2019: 4.66 mln tonnes) driven by output growth at Karelsky Okatysh and the Yakovlevskiy mine y/y. The Company expects to achieve total production of around 2mt of iron ore concentrate at the Yakovlevskiy mine in FY2020.
  • Coking coal concentrate sales volumes from Vorkutaugol increased 3% y/y.

SUMMARY OF KEY PRODUCTION, SALES VOLUMES

Production, thousands of tonnes

Q3 2020

Q2 2020

Change, %

9M 2020

9M 2019

Change, %

Crude Steel (Russian Steel)

2,890

2,807

3%

8,547

9,133

(6%)

Hot metal (Russian Steel)

2,402

2,331

3%

7,143

7,125

0%

Sales volumes, thousands of tonnes

Q3 2020

Q2 2020

Change, %

9M 2020

9M 2019

Change, %

Coking coal concentrate

1,218

1,276

(5%)

3,445

3,340

3%

Iron ore pellets

2,613

2,532

3%

8,112

8,192

(1%)

Iron ore concentrate

1,960

1,904

3%

5,333

4,660

14%

Total steel products (Consolidated)

3,006

2,551

18%

8,306

8,503

(2%)

Total steel products (Russian Steel)

3,020

2,561

18%

8,340

8,538

(2%)

High value added steel products, %

Q3 2020

Q2 2020

Change, %

9M 2020

9M 2019

Change, %

Severstal (Consolidated)

49%

43%

6 ppts

45%

45%

(0 ppts)

Severstal Russian Steel

49%

43%

6 ppts

45%

45%

(0 ppts)

SEVERSTAL'S CONSOLIDATED SALES (NET OF INTERCOMPANY SALES)

Sales volumes, thousands of tonnes

Q3 2020

Q2 2020

Change, %

9M 2020

9M 2019

Change, %

Coal:

344

370

(7%)

1,101

1,250

(12%)

Coking coal concentrate

46

104

(56%)

215

331

(35%)

Steam coal

298

266

12%

886

919

(4%)

Iron ore:

1,358

1,511

(10%)

4,530

4,785

(5%)

Iron ore pellets

1,355

1,461

(7%)

4,343

4,170

4%

Iron ore concentrate

3

50

(94%)

187

615

(70%)

Semi-finished products

97

100

(3%)

389

279

39%

Rolled products:

2,383

2,084

14%

6,637

6,916

(4%)

Hot - rolled coil

1,267

1,179

7%

3,643

3,310

10%

Hot - rolled plate

244

219

11%

715

702

2%

Cold - rolled coil

253

198

28%

661

743

(11%)

Galvanised and metallic coated coil

286

196

46%

701

729

(4%)

Colour coated coil

162

113

43%

373

365

2%

Long products

171

179

(4%)

544

1,067

(49%)

Downstream products:

526

367

43%

1,280

1,308

(2%)

Metalware products

145

135

7%

426

413

3%

Large diameter pipes

85

25

n/a

129

303

(57%)

Other tubes, pipes, formed shapes

296

207

43%

725

592

22%

SALES PRICE, SEVERSTAL RUSSIAN STEEL ('RSD')

Sales price, $/tonne

Q3 2020

Q2 2020

Change, %

9M 2020

9M 2019

Change, %

Semi-finished products

376

388

(3%)

385

427

(10%)

Hot - rolled coil

416

417

0%

423

506

(16%)

Hot-rolled plate

517

545

(5%)

558

660

(15%)

Cold - rolled coil

504

528

(5%)

536

621

(14%)

Galvanised and metallic coated coil

639

643

(1%)

638

724

(12%)

Colour coated coil

797

790

1%

789

894

(12%)

Long products

411

417

(1%)

419

476

(12%)

Metalware products

832

837

(1%)

852

965

(12%)

Large diameter pipes

825

778

6%

811

996

(19%)

Other tubes, pipes, formed shapes

480

477

1%

492

578

(15%)

Sales price, $/tonne

Q3 2020

Q2 2020

Change, %

9M 2020

9M 2019

Change, %

Weighted average steel selling price

510

500

2%

510

602

(15%)

NOTES:

  1. Sales prices are stated on EXW basis;
  2. Segmental data includes intercompany sales;
  3. Semi-finished products include pig iron, slabs, billets, ingots, steel casting and forgings;
  4. Large diameter pipes include all pipes with a diameter between 820 and 1420 mm.

See full version of the press release.

Disclaimer

OAO Severstal published this content on 09 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 October 2020 07:29:06 UTC

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