REG - Evraz Plc - EVRAZ Q3 2021 TRADING UPDATE

EvrazAnnouncement

28/10/2021 07:05

RNS Number : 5510Q
  
Evraz Plc
  
28 October 2021
  
 

 
EVRAZ Q3 2021 TRADING UPDATE
 
 
 
 
28 October 2021 - EVRAZ plc (LSE: EVR; "EVRAZ" or the "Group") today has released its trading update for the third quarter of 2021.
 
Q3 2021 vs Q2 2021 HIGHLIGHTS
·     In Q3 2021, EVRAZ' consolidated crude steel output edged up by 1.0% QoQ, mainly due to larger production volumes at EVRAZ North America. Production at the Group's Russian operations decreased slightly QoQ amid scheduled capital repairs.
·     Total sales of steel products decreased by 8.2% QoQ, primarily due to slowdown of Russian construction products market accompanied by lower sales of railway and semi-finished products because of logistics restrictions on the route and detentions in ports amid inclement weather. This was partly offset by better performance QoQ of EVRAZ North America.
·     Total raw coking coal production fell by 2.3% QoQ following scheduled longwall movements at the Osinnikovskaya, Yerunakovskaya-8, Uskovskaya and Raspadskaya mines. In addition, the Raspadskaya-Koksovaya mine had to temporarily slow its operations because of difficult geological conditions. Output from the remaining assets increased during the quarter.
·     Total coking coal concentrate production, including both the Steel and Coal segments, decreased by 1.8% QoQ, mainly because of reduction of coke production at EVRAZ ZSMK. The Coal segment's standalone coal concentrate production remained at the level of Q2 2021. 
·     External sales of iron ore products decreased by 10.1% QoQ, driven by the partial shift of sales to Q4 2021 amid temporary logistics restrictions westwards due to vessel delays.
·     External sales of vanadium products fell by 11.8% QoQ, mainly because of reduced global demand from the automotive sector amid the semiconductor shortage and slowdowns in the Russian oil, gas and rail sectors. In addition, some global steel mills scheduled major maintenance during the summer months.
 
 




Product, '000 tonnes 


Q3

2021


Q2

2021


Q3 2021/ Q2 2021, change


9m

2021


9m

2020


9m 2021/ 9m 2020, change




Total crude steel production


3,403


3,368


1.0%


10,185


10,163


0.2%




Russia


2,912


2,953


-1.4%


8,786


9,006


-2.4%




North America


491


415


18.3%


1,399


1,157


20.9%




Total raw coking coal mined


4,983


5,098


-2.3%


16,573


14,632


13.3%




Total coking coal concentrate

production


3,746


3,814


-1.8%


11,796


11,440


3.1%




Iron ore products production


3,504


3,750


-6.6%


10,648


10,563


0.8%




Total sales of steel products1 


2,978


3,246


-8.2%


9,281


9,652


-3.8%




   Semi-finished products


1,337


1,440


-7.2%


4,183


4,476


-6.5%




   Finished products 


1,641


1,806


-9.1%


5,098


5,176


-1.5%




Total sales of third-party steel products


213


217


-1.8%


564


639


-11.7%




Sales of coking coal products


2,462


2,761


-10.8%


8,047


9,539


-15.6%




Sales of iron ore products


303


337


-10.1%


951


1,287


-26.1%




Sales of vanadium in slag


1,834


1,624


12.9%


4,593


4,366


5.2%




Sales of vanadium final products2


2,864


3,247


-11.8%


9,479


8,366


13.3%




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
 
CONFERENCE CALL DETAILS
 
 A conference call to discuss the trading update will be held on Thursday, 28 October 2021, at: 
·      07:30 (New York time)
·      12:30 (London time)
·      14:30 (Moscow time)
 
Key speakers:
·      Sergey Markov, Director, Marketing and operational planning
·      Alexander Erenburg, Vice President, Vanadium division
·      Evgeny Terekhov, Commercial Director, Coal division
·      Olesya Afanasyeva, Senior Vice President, CFO, EVRAZ North America
 
To join the call, please dial:
 




+44 (0)330 027 1846 (local access) or 0800 031 4838 (toll free)


UK




+7 499 609 1260 (local access) or 8 800 100 9471 (toll free)


Russia




+1 334 777 6978 (local access) or 800 367 2403 (toll free)


US






Access code: 5102389
 
To avoid any technical inconvenience, it is recommended that participants dial in 10 minutes before the start of the call.
 
The Q3 2021 trading update presentation will be available on the Group's website, www.evraz.com, on Thursday, 28 October 2021, at the following link: https://www.evraz.com/en/investors/reports-and-results/presentations/
 
 
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 


Q3

2021


Q2

2021


Q3 2021/ Q2 2021, change


9m

2021


9m

2020


9m 2021/ 9m 2020, change




Pig iron production


2,716


2,719


-0.1%


8,118


8,306


-2.3%




EVRAZ ZSMK


1,445


1,435


0.7%


4,304


4,644


-7.3%




EVRAZ NTMK


1,271


1,284


-1.0%


3,814


3,662


4.2%




Crude steel production


2,912


2,953


-1.4%


8,786


9,006


-2.4%




EVRAZ ZSMK


1,824


1,821


0.2%


5,455


5,738


-4.9%




EVRAZ NTMK


1,088


1,132


-3.9%


3,331


3,268


1.9%




Total steel products production, net of re-rolled volume


2,721


2,693


1.0%


8,070


8,206


-1.7%




EVRAZ ZSMK


1,643


1,548


6.1%


4,750


5,008


-5.2%




EVRAZ NTMK


985


1,040


-5.3%


3,039


2,956


2.8%




EVRAZ Caspian Steel


93


105


-11.4%


281


242


16.1%




Iron ore products production


3,504


3,750


-6.6%


10,648


10,563


0.8%




Pellets (EVRAZ KGOK)


1,563


1,643


-4.9%


4,780


4,888


-2.2%




Sinter (EVRAZ KGOK)


946


922


2.6%


2,789


2,654


5.1%




Concentrate saleable (EVRAZ KGOK, EVRAZ ZSMK)


995


1,185


-16.0%


3,079


3,021


1.9%




Coking coal concentrate production


366


434


-15.7%


1,167


1,457


-19.9%




From own raw coal1


305


370


-17.6%


988


1,147


-13.9%




From third-party raw coal


61


64


-4.7%


179


310


-42.3%




Gross vanadium slag production2


5,198


5,206


-0.2%


15,202


14,496


4.9%




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 Q3 2021, pig iron production at the Group's Russian mills remained mostly flat QoQ.
Crude steel production edged down by 1.4% QoQ, driven by scheduled capital repairs at EVRAZ NTMK.
The total output of steel products rose by 1.0% QoQ, as EVRAZ ZSMK increased its production volumes by 6.1% QoQ through the processing of metal stockpiled during earlier capital repairs.
Output of iron ore products fell by 6.6% QoQ, mainly because of scheduled capital repairs at the Abagurskaya processing plant in September. This was partly offset by an increase in sinter production volumes of 2.6% QoQ at EVRAZ KGOK following the completion of scheduled maintenance and repairs.
 
Total sales volumes




Product, '000 tonnes 


Q3

2021


Q2

2021


Q3 2021/ Q2 2021, change


9m

2021


9m

2020


9m 2021/ 9m 2020, change




Coke


78


73


7.0%


224


316


-29.1%




Steel products, external sales


2,558


2,864


-10.7%


8,064


8,331


-3.2%




Semi-finished products


1,337


1,440


-7.2%


4,183


4,332


-3.4%




   Slabs


709


871


-18.6%


2,246


1,743


28.9%




   Billets


533


468


13.9%


1,625


2,211


-26.5%




   Other steel products1


95


101


-5.9%


312


378


-17.5%




Finished products


1,221


1,424


-14.3%


3,881


3,999


-3.0%




   Construction products


799


943


-15.3%


2,536


2,547


-0.4%




   Railway products


250


286


-12.6%


815


979


-16.8%




   Other steel products


172


195


-11.8%


530


473


12.1%




Steel products, inter-segment sales


7


11


-36.4%


22


46


-52.2%




Third-party steel products, external sales 


213


217


-1.8%


564


639


-11.7%




Iron ore products, external sales


303


337


-10.1%


951


1,287


-26.1%




   Pellets


303


337


-10.1%


951


1,287


-26.1%




Sales of vanadium in slag


1,834


1,624


12.9%


4,593


4,366


5.2%




Sales of vanadium final products2


2,864


3,247


-11.8%


9,479


8,366


13.3%




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 Q3 2021, external sales of steel products fell by 10.7% QoQ, driven by lower shipments of semi-finished and finished products in the reporting period.
Sales of semi-finished products fell by 7.2% QoQ because of logistics restrictions on the route and delays in ports amid inclement weather, although shipments from factories increased slightly. Sales volumes are expected to recover in Q4 2021. 
Sales of finished products decreased by 14.3% QoQ, mainly due to slowdown of construction products market after the successful Q2 2021. The sales of construction products declined by 15.3% QoQ.
Sales of railway products decreased by 12.6% QoQ, primarily because of logistics restrictions on the route and delays in ports amid inclement weather. 
Sales of iron ore products decreased by 10.1% QoQ, driven by a partial shift of sales to Q4 2021 amid temporary logistics restrictions westwards due to vessel delays.
External sales of vanadium products fell by 11.8% QoQ, mainly because of reduced global demand from the automotive sector amid the semiconductor shortage and slowdowns in the Russian oil, gas and rail sectors. In addition, some global steel mills scheduled major maintenance during the summer months.
 




Cash cost, US$/t


Q3

2021


Q2

2021


Q3 2021/ Q2 2021, change


9m

2021


9m

2020


9m 2021/ 9m 2020, change




Slab cash cost vertically integrated


309


290


6.6%


292


206


41.7%




Iron ore products (Fe 62%)


40


41


-2.4%


40


36


11.1%



 
 
 
 
 
 
 
 



 
 
Average selling prices




US$/tonne (ex-works)


Q3

2021


Q2

2021


9m

2021


9m

2020






Coke


380


307


320


149




Steel products


761


707


685


437




Semi-finished products1


691


604


596


318




Construction products


827


805


763


474




Railway products


900


838


859


848




Other steel products


862


740


755


492




Pellets


154


166


147


54




Metal Bulletin Ferro-Vanadium basis 78% min, free DDP, consumer plant, 1st grade Western Europe2


38.22


35.94


35.02


25.23




Ryan's Notes N.A. FeV 80% min, US ex-warehouse, duty paid2


37.66


35.99


35.23


24.09




1 Includes prices for pig iron
2 US$/kgV
 
In Q4 2021, iron ore production volumes are expected to increase following the completion of repairs at EVRAZ KGOK's burning furnaces and crushing complex in September. Pig iron production volumes are expected to remain at the level of Q3 2021.
 
STEEL, NORTH AMERICA SEGMENT
 
Production and sales volumes




Product, '000 tonnes 


Q3

2021


Q2

2021


Q3 2021/

Q2 2021, change


9m

2021


9m

2020


9m 2021/ 9m 2020, change




Crude steel


491


415


18.3%


1,399


1,157


20.9%




EVRAZ US mills


223


161


38.6%


611


642


-4.8%




EVRAZ Canadian mills


268


254


5.7%


789


516


52.9%




Total steel products production, net of re-rolled volume 


430


385


11.8%


1,215


1,291


-5.9%




EVRAZ US mills


278


273


1.8%


827


856


-3.4%




EVRAZ Canadian mills


153


112


36.0%


388


435


-10.8%




Sales of steel products


420


382


10.0%


1,217


1,321


-7.9%




Semi-finished products 


0


0


n/a


0


144


-100.0%




Construction products


63


82


-23.3%


211


194


8.8%




Railway products 


90


87


3.4%


280


304


-7.9%




Flat-rolled products 


172


143


19.7%


483


269


79.6%




Tubular products 


96


69


38.0%


242


410


-41.0%




 
In Q3 2021, EVRAZ Regina's crude steel production increased by 5.7% QoQ, mainly because market demand remained high. Part of the increase was caused by a low-base effect following the planned maintenance outage in Q2 2021. 
EVRAZ Pueblo's crude steel production increased by 38.6% QoQ as operations resumed from the unplanned downtime in June. 
Sales of construction products dropped by 23.3% QoQ because of steel flow constraints following the unplanned downtime in steelmaking in Q2 2021. 
Sales of flat-rolled and tubular products rose by 19.7% and 38.0% QoQ respectively, primarily because of the continued increase in market demand.
 
Average selling prices




US$/tonne (ex-works)


Q3

2021


Q2

2021


9m

2021


9m

2020




Construction products


1,015


900


911


660




Flat-rolled products


1,470


1,205


1,182


765




Tubular products


1,775


1,513


1,611


1,354






In Q4 2021, steel production and sales volumes are forecasted to be flat QoQ as market sentiments remain strong in the product segments served by EVRAZ.
 
 
COAL SEGMENT
 
Production volumes




Product, '000 tonnes* 


Q3

2021


Q2

2021


Q3 2021/ Q2 2021, change


9m

2021


9m

2020


9m 2021/ 9m 2020, change




Raw coking coal (mined)


4,983


5,098


-2.3%


16,573


14,632


13.3%




Coking coal concentrate (production)


3,380


3,380


0.0%


10,629


9,983


6.5%




* Starting from 2021 Raspadskaya incl. Yuzhkuzbassugol and Mezhegeyugol, the data has been adjusted
 
In Q3 2021, overall raw coking coal output fell by 2.3% QoQ. The reduction was caused by scheduled longwall movements at the Osinnikovskaya, Yerunakovskaya-8, Uskovskaya and Raspadskaya mines. In addition, the Raspadskaya-Koksovaya mine had to temporarily slow its operations because of difficult geological conditions. Output from the remaining assets increased during the quarter.
Output of coking coal concentrate remained flat QoQ during the reporting period.
 
Sales volumes




Product, '000 tonnes 


Q3

2021


Q2

2021


Q3 2021/ Q2 2021, change


9m

2021


9m

2020


9m 2021/ 9m 2020, change




External sales


2,462


2,761


-10.8%


8,047


9,539


-15.6%




Raw coking coal


104


299


-65.3%


541


2,021


-73.2%




Coking coal concentrate


2,358


2,462


-4.2%


7,505


7,518


-0.2%




Intersegment sales


1,533


1,682


-8.9%


4,755


5,327


-10.7%




    Raw coking coal


522


647


-19.3%


1,666


1,826


-8.8%




Coking coal concentrate


1,010


1,035


-2.3%


3,089


3,501


-11.8%




 
External sales volumes of coking coal products declined by 10.8% QoQ following lower sales of raw coking coal amid change in the product mix in favour of coking coal concentrate to meet customer needs. 
Shipments of coking coal concentrate were affected by a partial shortage of coal amid a large number of longwall movements at the Group's mines during the quarter. In addition, increased logistic burdens caused local disruptions in railcar and transport availability, which also limited shipments compared to the previous quarter.
Intersegment sales volumes of coking coal products fell by 8.9% QoQ, mainly because of the decrease in the supply of K-grade and KS-grade coal amid lower production volumes.
Sales of raw coking coal for 9m 2021 plunged by 73.2% YoY because of a high-base effect after the management's decision to sell off stockpiled materials in 2020 with the aim of lifting sales amid the prevailing downward trend in global coal prices and uncertainty caused by COVID-19 at the time.
 




Cash cost, US$/t


Q3

2021


Q2

2021


Q3 2021/ Q2 2021, change


9m

2021


9m

2020


9m 2021/ 9m 2020, change




Coking coal concentrate


48


37


29.7%


40


33


21.2%




Note: Starting from 2021, the methodology has been changed.
 
 
Average selling prices




 
US$/tonne (ex-works) 
 


Q3

2021


Q2

2021


9m

2021


9m

2020




Raw coking coal


97


59


67


34




Coking coal concentrate 


131


86


94


64




 
In Q4 2021, raw coal production is expected to increase QoQ, mainly because of the stabilisation of production volumes at the Alardinskaya and Raspadskaya mines, the completion of longwall movements at the Osinnikovskaya and Yerunakovskaya-8 mines, and the launch of new equipment at the Raspadskaya-Koksovaya open-pit 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
                                                                                  

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
  END
 
 
TSTEASEPASEFFEA